At work we are being asked to create XML files to pass data to another offline application that will then create a second XML file to pass back in order to update some of ou
Use elements for data and attributes for meta data (data about the element's data).
If an element is showing up as a predicate in your select strings, you have a good sign that it should be an attribute. Likewise if an attribute never is used as a predicate, then maybe it is not useful meta data.
Remember that XML is supposed to be machine readable not human readable and for large documents XML compresses very well.