How are you building 3D game environments for UE5 as a small team needing a tight design iteration process?

What are small teams or individual developers doing about 3D level creation in Unreal in 2023? Are there must-have tools or plugins?

In my case I am interested in building quite large levels but in a somewhat lower-detail low-poly style. I would be doing this either alone or with a very small team. I’ve done quite a bit of reading and searching, but I’m still not sure what my best options would be if I want to make a UE5 game that has a focus on large and carefully designed 3D game environments. For me, this one item is very important: It should be possible to build the map geometry and also place environmental things like lights and gameplay entities and prop meshes in the same tool, rather than building map geometry in one tool (like Blender) and then having to separately keep light and prop and gameplay entity positions consistent in another tool (like the Unreal Editor) as things get moved around and modified in the process of iterating on the level design. And it would be very far from ideal to build only a production-unsuitable prototype in this way and to need to separately build a final, difficult-to-iterate-on map later.

Think, generally, what’s possible with Source and Hammer. Or, better yet, what’s possible with Source 2 and Hammer 5. (Crucially, Source 2 uses mesh-based level geometry instead of brushes, as Source 1 did.) Not only is Source 2 Hammer suitable for building visually appealing level geometry, and getting those results quite quickly, it’s also a one-stop shop for managing lights, entities, props, and everything else that represents the actual content and gameplay of a game environment. But, there is no Source 2 SDK yet. And even if there was, I don’t think that overall the Source engine is nearly as capable as UE5.

Anyway, the closer to that Hammer experience that it’s possible to get with Unreal, the happier I would be.

Has anyone else been doing work like this with Unreal, or explored doing it, small teams working on games where 3D level design constitutes a large share of development effort? What have you been using?

I do know that HammUEr exists. But the licensing with Hammer is iffy, Quake map editors like TrenchBroom have much more limited features, and I think HammUEr only imports level geometry out of the box anyway, not lights and gameplay entities and such, which is the point I’m really stuck on here. Also, I would very much prefer using mesh-based mapping tools to brush-based ones.