I think I solved at least part of it but still would welcome additional ways in which to undertake this task.

The biggest part of the puzzle was to ensure that the meta data and model components from the original 12d XML were used to write the updated data. Not sure if both are needed but it ensured the data from the input, after manipulation, was written successfully.

I am also interested to see if anybody has any examples of using the 12dxml writer with source data coming from shape or file gdb reader. ​