I loaded up your file into Terragen 2. I have a lot to write about. I'll start with the atmosphere. The default 'flat plane' loaded when you start the program has an atmosphere. You added another, which I deleted. In the atmosphere quality tab, you had the setting at 900. 16 is fine for testing. The max I use is 128. The same with you cloud layer, it was set much too high. 1 normally is sufficient.
I removed the cloud shaders from the terrain and shaders tabs. My computer was Slowed! way down before I did all these things. I could not figure out what was happening at first. Now I have it to the point where I can work with it.
Generally, the Terrain Tab is used for the terrain features which use large displacements. You have two strata layers with the same settings except for the direction of the strata layers. The fake stones are okay here, since they are so large. The Shaders Tab is were you fine tune the landscape. Use small displacements here. You'll see when I post the modified terrain file.
More to come...
The program had a runtime error. I am going to send you my email address. I'll give you a few of my terrain files. There are a lot of files available here in the file sharing part of the forum.
You can look at what I, and others have done to get an idea of how things work. Remember, the most important thing about any endeavor is to have fun.