I would defiantly agree with using smooth terrain. It gives you more control over elevations and textures, so you don’t have to spend time with building hills or rocks or whatever. Plus it looks really nice if done right.
I would recommend this topic on smooth terrain: Smooth Terrain: How To's and Tips and Tricks
In addition, for lighting, I would recommend maybe add some Bloom and SunRays.
Good luck on the island!