Yes, your application would need to fetch the data out of CLOB column into an application variable. There are some LOB programming examples in one of the IBM Redbooks titled DB2 UDB for AS/400 Object Relational Support at ibm.com/redbooks.
In terms of integrating DB2 and XML data, I'd also highly suggest getting the following book from ibm.com/redbooks: The Ins and Out of XML and DB2 for i5/OS.
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