Intercept zip decryption key or files from an application
If an application is reading from a password protected zip file, is there a way to intercept the key being sent to decrypt the zip file. Or, is there a way to dump the files being read themselves? 
Yes but it heavily depends on the application and how you have access to it. You can decompile the application and look for the password, debug the running application, run a trace on calls that are being made, etc. It depends on what you can do.