I like to modify config files directly (like .gitignore and .git/config) instead of remembering arbitrary commands, but I don't know where Git stores the file references that get passed to "git update-index --assume-unchanged file".
If you know, please do tell!
It says where in the command - git update-index
So you can't really be editing the index as it is not a text file.
Also, to give more detail on what is stored with the git update-index --assume-unchanged command, see the Using “assume unchanged” bit section in the manual