Others should comment on this as well, but my understanding is that you would make one file per leader and in that file would ONLY have the trait changes.
E.g.
As to actually changing traits (instead of adding ones), that is the part I am not sure of. I do not know whether you can actually replace <TraitType>s within <Traits> and not just add ones given the WoC format (I have asked that question before, for a different tag, but have not gotten an answer yet)
E.g.
Code:
<LeaderHeadInfo>
<Type>LEADER_BRENNUS</Type>
<Traits>
whatever trait to add
</Traits>
</LeaderHeadInfo>
As to actually changing traits (instead of adding ones), that is the part I am not sure of. I do not know whether you can actually replace <TraitType>s within <Traits> and not just add ones given the WoC format (I have asked that question before, for a different tag, but have not gotten an answer yet)