Can I split lines into Elements with For XML?
Use a split string function of your choice and split on CRLF.

select E.ID,
       (
       select S.Item as Line
       from dbo.SplitStrings(E.Body, char(13)+char(10)) as S
       for xml path(''), type
       )
from dbo.Example as E
for xml path('row');


Have a look at the blog post Split strings the right way – or the next best way by Aaron Bertrand for a couple of versions to choose from.