Am I on the right track with this?

Kinda but not really. There is no need to look up to parent to construct/generate an xpath for subsequent search, xpath/xml is about paths, .. means parent, just like in filepaths

Any pointers to how this can be done?

:) I gave you plenty of examples, how you don't have to name the tags you're looking for, how to find a node with text you want, and all siblings until some other tag ... maybe you need something stronger than hints :)?

Can this task be done easily using Perl/RegEx parsing on text files rather than XML files?

No. Consider your questions up to this one (walk tree); now imagine you also have to build that tree (libxml job) -- that's a lot more work

Also forget about XML::Parser its too low level. If you're tempted by that approach use XML::Twig :) it comes with many examples/tutorials / http://xmltwig.org/xmltwig/quick_ref.html