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That's basically how it works, yes. Make it an element, change that element, then update in the scene. That's the best way of working with an asset you know will be used a lot.
What you can do is make another element that's a like a mini test of your level with anything that might be useful in it--like the character and so on. Then when you go back to your pickup and need to tweak its logic, you can easily import the mini-test-level to test the changes as you go. Then delete the mini-level and save the element. Then go back to the scene and update, and you know it already works.
There is one other feature that is useful for some but not all things: live cloning. If you use the clone *tool* and turn on the "live cloning" option, then use R2 to copy things around... any sculpts you live-clone will always be linked to the original. So you can edit the original or any live clone and all live instances of that sculpt will update.