This right hand side contains the list of files present in the selected folder on the left. It does NOT show ANY sub-folders inside. It will be empty if the selected folder did not have any files (and even if it had sub-folders that did have files)
Ignoring files
Some applications create temporary files that are only used for the application to work. These are never backed up (in fact they should not be part of our repository) You can ignore some files by using a special file called .gitignore. This is explained more here: How to ignore temporary files
Pop-up Menu
When you right click in this area, you can get a list of commands that you can activate. Those commands only work on the selection you had made in this file listing. Some commands work only on one file that you selected. But some other commands can work on multiple files.