How-to trace PNG image in Illustrator

kanch,

As I (mis)understand it, you wish to have just one cutline following the outermost shape.

To get that, you can use copies of the original PNG and:

1. Create a rectangle exactly fitting the outer boundary of the PNG, for proper alignment;
2. For the tracing, use the black and white setting with a threshhold that makes the artwork all black, and then give the resulting path the right stroke to serve as the cutline;
3. Group to keep them together.

You can then either just use the original PNG or trace it with the desired colours as suggested by Ton:

4. Again, create a rectangle exactly fitting the outer boundary of the PNG, for proper alignment;
5. Trace as desired;
6. Group to keep them together.

And then you can align the cutline/rectangle Group with the PNG or with the colour/rectangle Group.

Or you can make the copy/copies exacltky on top of the original PNG, and perform and keep the tracing(s) exactly in the original place.

You could try to use a limited number of colors in Image Trace