Yup, just for looks. The XLR gets it's air through the wheel wells.
No, I don't think you can cut out an area to induct air, you'd lose the integrity of the grille.
I see to bad, but has anyone painted their "V" race mesh grill Black? I kinda like how it looks on this 360 walk around on Cadillacs website:
if not can someone good in Photoshop paint the grill of a Black XLR-V in Black?
I think it will look good.