The screens might not look fantastic at all, but I'm really anxious to see how this turns out. Most of my levels don't really look much better than this, and I can't seem to improve it either. As you said, stretched textures on terrains, sharp edged sides of big terrain hills and not really good models are a problem, but also the "made-with-3dgs" feeling wont go away very quickly. Somehow models never seem to be part of the environment, like the underside of grass or trees.
I hope you manage to turn this into something really nice. If you find ways to fix these problems, it would be a good example for (IMO) many developpers.
What I did learn is, that when you divide your invironment in much smaller parts rather than one big terrain, you get the feeling of a much bigger environment. A different problem that occures though is the blending to different parts. You'll need to cover or stitch the sews with trees/rocks/grass/water, small 'sewing' terrain parts or other, to me unknown, methods to blend two areas to eachother so it wont be visible for the player.
Anyhow, I hope you can manage to create something nice, and receive some tips how to solve such problems

.
Good luck!