I released an update for my App and it was approved. It was approve despite the fact that it included a serious localization bug where most users are getting the wrong language.
I had to do this recently. I was able to adjust a previous version archive. I started by copying the archive and opening the copy, then editing the info.plist files, adjusting/incrementing both the version and build numbers at both the archive and app package levels. Then uploaded to iTunes, which recognized it as a new version.