You can use the sculpting tools to raise the terrain and set the sensitivity dial to a lower level. To smooth of the edges, can use an array of multiple splines such as a road or track arranged as if you are pasting plaster and paper strips over the landscape. You then set the height by clicking on the circles using the height adjust tool found under the advanced options. Do this at both ends and then smooth the terrain. What this will do is conform the landscape to the slope set by the angle of the splines.
The other way to do this is a bit more complicated and requires using a third-party program called TransDEM. TransDEM will import DEM data and ordinance (topographic maps), combine the two and export a route ready for laying track and placing all the other assets. The grid texture is replaced by the map or image you imported, and you can use that to as a guide when placing buildings and roads. This is an addicting way of route building and can be used for fictional as well as prototypical routes, and more importantly can be used to model long forgotten branch lines and routes if there's a clear enough image shown to know where to place the tracks.
