Alex,
My recommendation is to start small. I know it's great to think big and want to build the world of your grandest dreams, but both mentally and physically it will be too much as doing this is quite overpowering.
So start small and build this route as a learning project. My original route, which is now still a kernel of my current big route, started out as a six baseboard route. My track laying was really awful and my texturing was quite deplorable. Recently I came across a backup copy of version 2.0 done in TRS2004, and laughed at my route building! But I will say, I learned a lot from those early days and the trials I went through to achieve what I wanted then is quite amazing. Yes, I had some good ideas and carried them through.
Making hills can be a pain, but there are some things you might want to try:
Raise up a blob of terrain, however, and you need to practice and fiddle with sensitivity settings. The problem is the tools are too drastic and fast which causes the hills to grow too quickly. By setting the sensitivity up or down, you can make hills slowly and carefully. I find when I'm raising and lowering terrain with these tools, and texturing too, they seem to work better for me if I zoom out a bit. The smaller cursor at the higher elevation off the landscape is easier to control. Give this a try too and see if it works for you. Once you get a hill in place, you need to soften the sides. Use the plateau tool and run that along the sides. This will also smooth out those jaggy edges you get when you smooth a track bed. You'll have to raise, smooth, raise smooth, and repeat multiple times to get the hills you want.
In addition to these topology tools, make use of road splines. Yes, lay out a bunch of splines from the top of a hill to the bottom, don't click on the circles to tighten them up. Then click the smooth terrain under the road splines. What this will do is create smooth slopes into valleys. Also use the splines to create beaches and waterfronts as you can raise or lower an end and then smooth the ground up under them.
As Roy and Cascade say here, there's no need to use TransDEM to create terrain. If you want to create a lot of terrain quickly, use those displacement maps. Yes, you can import greyscale images, even clone one of the built-ins and bring in your own images you've created in your favorite image editor. Once you have the images you like, you can then fill a selected area and raise or lower the terrain to your liking in one shot. It takes some practice to stretch this over a baseboard or two, or three, but it works quite nice. With the area filled, and terrain raised, once you lay your track and texture the ground, no one would know it came from a displacement map.
Texturing too can be a pain, but again work slowly at it and in small areas at a time. With this too, you need to work small. Find a base texture, a ground texture is good, then put your grass and other textures on top. I find this produces better results than painting lots of textures on the grid. You'll find that rotating the textures using the [ ] keys is quite useful for some textures, while those created from photos look horrible. With these photo textures, use smallest areas of them and paint other textures into them. Greens next to yellows, blended into browns works well.
Speaking of blending... I find if I use quick mouse movements rather than slow movements, I can get a transparent blending of textures. This is great when trying to get the grass near the tracks to come out right.
And speaking of ballast... I find this goes down better after I've put the grass or other textures down. One of my things is to use a dark, cinder-like, ballast as a first layer, then use a newer granite or limestone ballast that matches my track on top of that. I put the darker ballast down wider and the granite on top closer to the tracks. This is much in keeping with how the tracks were laid in my area. Up until WWII, the local railroad used cinders instead of granite ballast on its mainline. This is why we have cinders, I guess, in the gutters and still in the yards.
For tracks... It's a pain trying to blend rusty rails into mainlines, but it can be done. The choice of track is something that you need to pick. You may end up replacing track numerous times as you go from one content creator to another. It took me several tries to get my tracks of choice, and then even now I still look around for something that will blend nicely from rusty and old to brand spanking new and shiny for the mainline. I have gone as far as to retexture, with moderate to poor success, rusty track with lighter ballast so that the two kinds of track blend better. In general rusty track goes in my yards and on less than used often sidings.
Track and roads, footpaths, and dirt paths, present another problem unto themselves. The problem is some of them float above the terrain. This has always been a peeve of mine since I discovered Trainz in December 2003. I've spent more time lowering track and roads a tiny bit, maybe .23 meters or less, so that the splines at least are in contact with the ground. Some of the newer track doesn't have that problem though so you might want to try that first before looking at the older stuff.
Anyway keep these tips in mind. Plan on scrapping your first route, or if it's good enough, use it as part of a growing empire.
