So here is how I would do it: you only need to update this one tag (possibly many times in the file), so I would use twig_roots and twig_print_outside_roots here: you just go through the file, outputting it as-is unless you find the path, in which case you use a handler to change the content of the element. This will give you the minimum memory footprint (and it's pretty simple too!).

Call this as update file.xml TraceNumQuery/Path http://foo.bar:8080/baz

 #!/usr/bin/perl -w
use strict;

use XML::Twig;

my $USAGE= "$0 <file> <path_to_update> <value>";
die $USAGE unless( @ARGV == 3);

my( $file, $path, $value)= @ARGV;

# $_ is set to the current element in the handler
# you could also delete the element after printing it
# for even less memory usage
my $twig= XML::Twig->new( twig_roots => { $path => sub { $_->set_text(
+ $value); $_->print; } },
                          twig_print_outside_roots => 1,
                        );
$twig->parsefile( $file);
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