Using XSLT to change XML and modify node with XPath

Dear all,

my question is:

i need to transform XML1 to XML2. The problem I have is that i need to
query XPath to get required data. In this example, i need to find all
values in children of var-path. So, when i search for value of SubVar
in XML 1, i need to use previous nodes in final path.
In XSLT i only managed to copy XMLs and to apply function to
<test-node>. But it is not working as i wanted.
I prefer XSLT 2.0

Thanks for help!

XML 1:
<?xml version="1.0" encoding="UTF-8"?>
<xml>
 <def>
     <name>Var1</name>
     <val>0</val>
         <def>
         <name>SubVar</name>
         <val>012</val>
     </def>
 </def>
 <def>
     <name>Var2</name>
     <val>1</val>
 </def>
 <test-node>
         <use>
             <var-path>
                 <path>Var1</path>
                 <path>SubVar</path>
             </var-path>
         </use>
 </test-node>
</xml>

XML 2:
<?xml version="1.0" encoding="UTF-8"?>
<xml>
 <def>
     <name>Var1</name>
     <val>0</val>
         <def>
         <name>SubVar</name>
         <val>012</val>
     </def>
 </def>
 <def>
     <name>Var2</name>
     <val>1</val>
 </def>
 <test-node>
         <use>
             <var-path>
                 <path value="0">Var1</path>
                 <path value="012">SubVar</path>
             </var-path>
         </use>
 </test-node>
</xml>