Many thanks, Mike, for helping confirm some assumptions.
Yes, XSLT 2 ought to help re: RTF & Etc.
(Your mentioning of looking out for xsl:key and recursion gives me more food for thought...)

Rumor has that there is a proposal to include an element
  xsl:kay
into the bugfix XSLT release after 2.0 is out. If something
goes wrong, just insert it into a suspect place and you'll
get detailed explanations what was wrong, how to correct it
and how to extend the code to solve your original task more
efficiently.
Note that XSLT 2.5 conformant processors are not required to
implement this  element.