Well unfortunately once complete I went into the game and typed "cow mesogea 0,0" appeared in the game world and damn if it doesnt work!!!!! It works ok, I just saw Mesogea in Skyrim, only numerous times bigger. To test the LOD over distance I decided to go "cow mesogea -200,-20" and saw the sea at the farthest southern shore, well almost bar another thirty or so cells. Yes LOD appears there too. I am just producing a sample movie to show that a 512x512 worldspace can be made with L3dt (which I intend to buy now when the trial runs out), TESAnnwyn and Oscape. There is a long way to go yet as we need something that will produce LOD trees, buildings and the like, but anyway, this shows there is a beginning and that 3rd party tools, unless Bethesda care about TESVI, are the way to go.
There are disappearing distant objects issues, as you will see mountains in the far distance fade out when looked directly at. Odd indeed, because looking obliquely at them they re-appear. The video will show what I mean. That may be an ini setting or likewise, or it may be something else (suspicion is an ini issue). However main points are:
L3dt can make a viable map, with practice, its cheap and help is available here to get over the basics.
TesAnnwyn can port a heightmap to a Skyrim esp.
TesGecko can create a master file for Skyrim from an esp.
Oscape can produce LOD meshes and ground textures (but needs polishing - has the possibility of being a real powerhouse of a tool if it can do distant trees, buildings and the like)
The Bethesda tools are $hizer. (have the possibility of being all singing, all dancing but for a bit of effort and commitment from B.)