I need help deciding how to create my 512sq km world

Always, regardless of nanite which apparently made it onto landscapes.

Doesn’t really need any. Its a few drawcalls (when done properly just one material per tile with around 3 to 6 textures).
Vs the drawcall count of a landscape which is based on size and number of components but will likely always exceed that of a mesh.

Thibk about it this way
Does putting a cube in your scene slow performance? No…
But putting in a landacape will

You can make it anywhere.
Blender has GIS addons that can be used to make a plane conform to a heightmap.
Theres plugins for just about anything out there.

You can even levarage unreal by sculpting the terrain and exportong the landscape as a mesh to be optimized and worked on (though beware that 8km^2 imports at LOD0 have more verts (1 per meter) than most standard settings on DCC render comfortably - so processing times are high.

Confused by this. What is it you are scaling and why do you think it would affect performance?

It is, you can move landscapes howver you want - though when you do sometimes you cause issues.

The most common use case for moving landscapes around is achieving higher detailed slopes (using a lower Z scale value) on tiled portions. So you move the landscape up vertically to align with wherever the last tile ends, and the Z scale of the landacape is uniformly set for all tiles.
Honestly, once you get into something this silly/complex you should probably abandon whatever sinking ship of a project commisioned you…

Re the rest and step by step stuff.

Your first step is to learn how to use GrassGIS or any other gis program.

The second task is for you to study and understand what the ESRI format is and why it’s important.

The sub step to the second point here would be to lern how to process vector shapes in the GIS program so that you can offset the value of the heightmap prior to export based on custom modifiers (adding in river beds and lakes which lidar doesn’t scan).

The third task would be to download and crop out the area you want in your gam, work on it with the knowledge from steps 1/2/2.a to export a single or tiled heightmap with the correct esri format applied.

Once you have the tiles done, then you can start working on producing slope maps to dress them (materials) in GIS, and export the matching tile sets for the materials to use.

Once you have those, you can move the terrain to just about anything including Gdot or a different DCC. It sort of becomes trivial at this point.