for one, make your terrain away from your "good copy." actaully blend your terrain the way you want to and then just copy and paste it onto the "good copy."
Also, if you don't need extended terrain, just use it, isom is always going to be perfect and look tons better(unless you're a pro). for example, your low dirt-water cliffs should have just been made with isom. of course, except for the area where it connects to the bridge.
I'm not sure if you really want or need everything to be horizontal and vertical, but having diagonal streets will make things look better and allow you to have nice looking lane dividers, sidewalks, properly angled buildings, and a bunch of other things
probably stuff you try to make will make it blocky a bit. if some of it is, maybe you can add some sprites to cover it up like lamposts and stuff to disguise it...know it the different tiles wont align perfectly so its just a suggestion...