How could I achieve the Twixtor effect with the VSE (Twixtor in After Effects).
Twixtor, and other apps that do slow motion, use a technology called Optical Flow that estimates motion vectors to create interpolation. There is no way, that I'm aware of, to do optical flow in blender.
Blender has no temporal interpolation for video other than repeat or drop frames, or cross-fade (frame-blend) between two frames.
None of those will give you the smoothness of extreme slow motion.
For an open source alternative to do optical flow re-timing try