For example, with a harness that goes into a junction box and splits off into multiple different looms, can I just map the connections at each end in the netlist and map the test point connections at either end of the harness in the Xref?
The ability to resolve internal connections is only there for the occasions where you have not already mapped the end to end connections. So, if you have an internal component such as a terminal block and you have already worked out the route through the component, then yes you simply enter the extremity From-To details in the netlist and XRef and the system will test from the one extremity to the other.
One tip is to put the terminal block reference (or other component) in the “connection detail” field in the netlist, so when the report shows a failure between the two extremities you will see on the report that the circuit passes through a terminal block and you will know to go look there for the fault.