bpcw001's post in XMLTools 2.0 installer not finding XML.DLL was marked as the answer
Weird that it finds FSX, but no dll.xml file.
As you said, dll.xml is supposed to live in C:\Users\<username>\AppData\Roaming\Microsoft\FSX
If you have a dll.xml file there, you need to add the following lines:
<Launch.Addon>
<Name>XMLTools</Name>
<Disabled>False</Disabled>
<ManualLoad>False</ManualLoad>
<Path>XMLTools.dll</Path>
<DllStartName>module_init</DllStartName>
<DllStopName>module_deinit</DllStopName>
</Launch.Addon>
Then everything should work.