The trace goes from point A to B. So you can use them any way you want 
You can do it ‘foliage tool style’ and paint stuff on the mesh, or you can do casting inward from a sphere onto the mesh. Definitely.
Changing the instances is easy, because you can just change the mesh used by the ISM. But changing the main mesh is more difficult, because nothing is going to auto-adjust. You have to do that. So it would mean doing the trace from scratch.