Edit Layers allows you to paint on the terrain and use splines.
So long as you have sufficient memory and GPU you can import heightmaps up to the maximum supported.
Yes, easily. Even with the free TerreSculptor 2.0 that is still available on the web site.
TS2 can handle heightmaps up to 46000x46000. And it is free.
TS3 can handle heightmaps up to 1 million and has a massive amount of new features.
I don’t recommend doing that. Things like collision traces may miss if the scale is set smaller.
That isn’t how Unreal Engine works. It doesn’t map PNG grayscale pixel values to real world elevation ranges. So “under water” or “above water” is where you place a water plane if you are even going to use one. The entire Landscape actor can be moved anywhere on the world XYZ coordinates.
Blacker pixels just mean lower elevation while whiter pixels mean higher elevations.
You always want to normalize all PNG-16 files that you import into Unreal, and then set Scale Z where 100 is 512 meters of elevation range.
You need to decide who you are targeting with this design and what level of computer hardware. That will determine what your minimum required framerate is, which will determine what Landscape design you can get away with.
If you are going to go with a 32km x 32km map with a dense foliage setup, with either World Composition or World Partition, you are now limiting yourself to probably 32GB and RTX-2080 minimum for required system hardware.