Generating correct excel xls format

There are two basic approaches to this.

You asked about the first: Automating Excel to open and save the file. There are in fact two ways to do that. The second is to use Python tools that can create the file directly in Python without Excel's help. So:

1a: Automating Excel through its automation interface.

Excel is designed to be controlled by external apps, through COM automation. Python has a great COM-automation interface inside of pywin32. Unfortunately, the documentation on pywin32 is not that great, and all of the documentation on Excel's COM automation interface is written for JScript, VB, .NET, or raw COM in C. Fortunately, there are a number of questions on this site about using win32com to drive Excel, such as this one, so you can probably figure it out yourself. It would look something like this:

import win32com.client
excel = win32com.client.Dispatch('Excel.Application')
spreadsheet = excel.Workbooks.Open('C:/path/to/spreadsheet.xml')
spreadsheet.SaveAs('C:/path/to/spreadsheet.xls', fileformat=excel.xlExcel8)

That isn't tested in any way, because I don't have a Windows box with Excel handy. And I vaguely remember having problems getting access to the fileformat names from win32com and just punting and looking up the equivalent numbers (a quick google for "fileformat xlExcel8" shows that the numerical equivalent is 56, and confirms that's the right format for 97-2003 binary xls).

Of course if you don't need to do it in Python, MSDN is full of great examples in JScript, VBA, etc.

The documentation you need is all on MSDN (since the Office Developer Network for Excel was merged into MSDN, and then apparently became a 404 page). The top-level page for Excel is Welcome to the Excel 2013 developer reference (if you want a different version, click on "Office client development" in the navigation thingy above and pick a different version), and what you mostly care about is the Object model reference. You can also find the same documentation (often links to the exact same webpages) in Excel's built-in help. For example, that's where you find out that the Application object has a Workbooks property, which is a Workbooks object, which has Open and Add methods that return a Workbook object, which has a SaveAs method, which takes an optional FileFormat parameter of type XlFileFormat, which has a value xlExcel8 = 56.

As I implied earlier, you may not be able to access enumeration values like xlExcel8 for some reason which I no longer remember, but you can look the value up on MSDN (or just Google it) and put the number 56 instead.

The other documentation (both here and elsewhere within MSDN) is usually either stuff you can guess yourself, or stuff that isn't relevant from win32com. Unfortunately, the already-sparse win32com documentation expects you to have read that documentation—but fortunately, the examples are enough to muddle your way through almost everything but the object model.

1b: Automating Excel via its GUI.

Automating a GUI on Windows is a huge pain, but there are a number of tools that make it a whole lot easier, such as pywinauto. You may be able to just use swapy to write the pywinauto script for you.

If you don't need to do it in Python, separate scripting systems like AutoIt have an even larger user base and even more examples to make your life easier.

2: Doing it all in Python.

xlutils, part of python-excel, may be able to do what you want, without touching Excel at all.