If the preferred way to tackle this would be to improve the layout editor first, it will also have an impact on InSim, as it will need to take the additional features into account. The most obvious change would be in the ObjectInfo struct, I think; it would need to increase in size from 8 bytes to whatever is needed for higher precision placement of objects (especially along Z axis and heading), and this could also affect other packets that have parameters using the same format as ObjectInfo (JRR, UCO and AXM use ObjectInfo directly, OBH uses same format for XYZ and index).
With that said, and following what thegamer23 said, I think it could be nice to have grass/gravel/asphalt (and any other type of surface, really) as a flag in what are currently concrete blocks only. That way, combined with higher precision placement, you could make proper terrain within the layout editor. It would most certainly require 2 things, though: a higher object count, which is already an issue for more advanced layout, and as a nice-to-have bonus, a layer system, so the entire layout wouldn't become a cluttered mess from "terrain blocks".
As far as InSim is concerned, the increased ObjectInfo size, plus the increased object count limit, would require more bandwidth, but some clever grouping of values could help alleviate this (this is already the case for some data across InSim).