I have a large archive with files that I need to edit, but I don't want to extract / zip every time. Is there a way to edit the files directly while in the archive? I opened them and when I save it prompts for a location.
Simple answer is NO. There's no way to tell how big the resulting file will be after edit so it can't just be stored back in the same place in the zipfile. What you might be able to find is a program that allows you to do the extract/edit/rezip without you having to worry about the details yourself. It would help to specify your environment (OS etc).
Use an editor that can look inside archives.
You don't say what platform you're using. If you use Ubuntu with its default interface, this is completely transparent: click on the archive, then click on the file inside the archive. More generally, open the archive in the Gnome archiver (File Roller) and edit the file in a Gnome application.
Emacs is available for every major desktop platform (and many minor ones) and transparently edits files inside archives (provided the relevant command-line archiving tool is installed).