I have DirectX 7 installed on the VM, which is the version the game asks for. I also have VMWare Tools installed on the VM However, as I am typing this, my VMWare is updating. Let me see if this helps.You don't need a VM to play the sims 1 it will happily run on any windows.
You just have to do some things manually.
View: https://www.reddit.com/r/thesims/comments/pmzyw0/yes_you_can_get_the_sims_1_running_on_windows_10/
Since you get an directx error I would guess that you don't have the GPU correctly set up in VM or you didn't install directx on the VM.