Hi,
While creating API Proxy policies, with the help of available videos, I was able to work out some basic functionalities, but is there any documentation available for all the XML tags that a particular policy supports so that I can explore more on that.
Yes, Absolutely. Take a look at Apigee Docs Policy Reference Overview. Click on the policy to see full details of each Apigee Edge Policy XML element & Attribute.
For example,
Quota Policy - http://docs.apigee.com/api-services/reference/quota-policy
Spike Arrest - http://docs.apigee.com/api-services/reference/spike-arrest-policy
You can access rest of the policies detailed documentation in above mentioned link.