I have a similar problem though using the various terrain brushes yields half way decent results, pros and cons 
The editor mini tuts show you can change terrain resolution, and its obvious where it is, but Iām unable to change mine , greyed out now.
Is there a way to change this, and would increasing it help decrease those blocky polygons enough or be too much of a perf. hit on huge terrains ā¦
thx
nl