You need to split the string retrieved from the text box based on the new line like this:
string[] lines = theText.Split(new string[] { Environment.NewLine }, StringSplitOptions.None);
Once you have values split for each text box, you can use System.xml.linq.xdocument class and loop through the values that you retrieve above.
Something like this:
XDocument srcTree = new XDocument(new XElement("Root",
    new XElement("entry1", "textbox value1")))
You can retrieve a xml document using a linq query or save it in an xml file using the Save method of XDocument
The below code will give you a string of XML data from the textboxes:
private string createXmlTags(TextBox textBox1, TextBox textBox2)
    {
        string strXml = string.Empty;
        string[] text1Val = textBox1.Text.Split(new string[] { Environment.NewLine }, StringSplitOptions.None);
        string[] text2Val = textBox2.Text.Split(new string[] { Environment.NewLine }, StringSplitOptions.None);
        int count = 1;
        IList<XElement> testt = new List<XElement>();
        
        for (int i = 0; i < text1Val.Count(); i++)
        {
            testt.Add(new XElement("Entry" + count, text1Val[i]));
            while (!String.IsNullOrEmpty(text2Val[i]))
            {
                count = count + 1;
                testt.Add(new XElement("Entry"+count,text2Val[i]));
                break;
            }
            count = count + 1;
        }
        foreach (var xElement in testt)
        {
            strXml += xElement.ToString();
        }
        return strXml;
    }
You can then insert the code to an existing xml document. Follow: How can I build XML in C#? and How to change XML Attribute