I would say the key issue here isn't so much the retouching which is fairly basic stuff. The difficult thing to pull of is tracking the woman's face so that all the retouching stays in the right place as she moves and sings.
While After Effects could do the job, I think there are programs that might do it better. I've never been very happy with After Effect's tracking (although it seems much better in the latest version). I would be inclined to use a program like Mocha to track things and then Nuke or Shake to layer in the retouching. Actually if you use Mocha, then there's no reason why After Effects wouldn't be a decent choice for the retouching either.
Those are my thoughts, but it's been a while since I've done that sort of visual effects work so there may be things I'm missing here.