A: No. Citra cannot read .7z files. You must extract the ROM first.
: Currently, the Azahar Emulator is one of the primary tools that natively supports the .zcci and .z3ds formats. Other popular emulators like Citra typically require standard decrypted ROMs or CIA files, though some community builds may offer varying levels of support for compressed assets. 3ds games highly compressed
Support for compressed 3DS backups is here! - Azahar Emulator 3ds games highly compressed