Debugging a Firefox addon is a slow process: (1) edit source code in a JS editor (2) package into XPI using a build script (3) drag into Firefox to install (4) restart Firef
You need the "edit source" and "restart firefox" steps; they can't be removed from the process...
When you install the addon, the javascript ends up on disk, in your firefox profile. If you edit it in there, and restart firefox, the new stuff will be picked up. When you're done, create the xpi from the files in your profile.