That parameter tells the serializer to "globally" (per serialization) turn indentation on/off, no? I would need to indent all elements in general but ignore indentation for specific elements. Is that covered by the indent parameter (it only accepts yes/no as value)?
Yes, this parameter is global. As far as I know, there is no option to locally control indentation, so you could use XQuery to build the desired XML representation which you can then serialize.