So I'm trying to build a little something outside Cyrodiil's borders but I want to replace the objects from the LODForest region with my own generated objects. Would it be good practice to simply obliterate the region's generated objects and pathgrids? I ask this because I notice that in other mods that do this, the region is not deleted.

EDIT: And while we're at it, is there any way to reduce the size of my ESP, in which I've made some heightmaps?
Said heightmaps were made in the CS itself, since I can't for the life of me get an external program working (and don't really care to try at this point...).

You should ask Sandor of the Silgrad project who has a remedy at his webstie. Offhand I can not remember what it is, but he should have some good advice for you.