Localization isn't supported yet, but I think it's coming something in A17.* or A18. So we'll have an awkward period where we don't have a lot of flexibility with it.
Only the XML files from the Mods folder get pushed from the dedicated (localization doesn't either).
As for SDX, it will work along side with the Mods. You will still neet client side installs for any SDX mods, any mods that contain asset bundles, or custom icons. SDX can compile Scripts and PatchScripts into the DLL, and it also can handle the Localization merges, like it always has.
From a player perspective, they'll install the mods like they normally do: Copying a zip file with all the files in the right place.
xpath and modlets are an easier way for modders to create small patches and portable mods for others to enjoy that is also less maintenance for them.