Without the window manager, you would not be able to move your windows around. The window manager is in charge of basic windowing functions such as minimizing, maximizing, resizing and moving windows as well as controlling the mouse pointer. The system administrator usually decides on a window manager for all new counts. A user has the choice of changing to another window manager. Hence, programs can actually run within the context of other programs.
Directories are an organized and convenient way of storing useful data.
Each user account consists of some disk space on the network file system. For example, each user has access to 10 MegaBytes of disk space. A user can store files in his directory. Let's say you wanted to keep all homework for EN3 in one separate space. You could then store all EN3 related files in this directory.