The slice corresponds to a simple relation between x and y, in this case, x=y. So you can substitute that and use Plot:
Plot[Sin[x y] /. y -> x, {x, 0, 1}]
Other slices will have different relation between x and y, and can be handled the same way.
If you prefer the horizontal axis to correspond to distance along the slice instead of along the x axis, you could use ParametericPlot instead.
To show this section on the 3D plot, use ParametricPlot3D:
Show[
Plot3D[Sin[x y], {x, 0, 1}, {y, 0, 1}],
ParametricPlot3D[Evaluate[{x, y, Sin[x y]} /. y -> x], {x, 0, 1},
PlotStyle -> Black]
]
To show x=0.5 plane up to the intersection with x=y plane, combine this with your plot:
With[{X = 0.5},
Show[
ParametricPlot3D[{X, y, Sin[X y]}, {y, 0, X}, PlotStyle -> Blue],
Graphics3D[{Blue, Thick, HalfLine[{X, X, Sin[X^2]}, {0, 0, 1}]}],
PlotRange -> All
]
]