My route too is freelanced, but the DEMs work out well. I've altered some of the terrain to what, and when it's all blended in, no one knows the difference. I use a combination of grayscale height maps, my own landscape fiddling (raising and lowering), and premade DEM maps byt Fishlipsatwork.
Recently I've added in a branch line to an area that never had rail service, or at least I couldn't see any signs of it in aerial maps and photos. So I went about surveying the area on the DEM myself, then sighted out the most logical route the rails would follow. What was in real life the Bucksport Branch of the old MEC (Guilford), is now the mainline from Bristol (Bangor) to Plymouth (Bucksport). In Bucksport, or Plymouth on my route, I've continued the mainline along th shore past the terminal. This is a someday expansion point, which I may put some portals on. The line also crosses over Bucksport Harbor on a drawbridge and continues along a river. (There are actually two draws that form a wye here). This is where the landscape connects to the rest of my original route.
In the Bangor (Bristol) area, there's a branch out to a peninsula. This is my Sandy Point branch, which I mentioned before. This was sighted down the landscape, and the tracks were laid using realistic height measurements, or at least they seem that way to me. I ran a test passenger train along the bare landscape (no trees or buildings except for the station), and it's pretty good. There are a couple of places that need some regrading, but that's it.
In the North Maine Jct. area, I've followed the route true to form. I added in a couple of freight-only branches and a stretch of shopping malls and industrial parks. From looking at the aerial photos, i wasn't too far off on this. I also modified part of this area on the remote end to connect the DEM to another part of my route.
When driven, other than the bare places still, there's very little way of knowing which is a DEM, my creations, or even an imported route from someone else. This I think is a fine art and makes or breaks a route.
John