In general don't go nuts with the hoe until you get the pickaxe, it will level the ground to the level of the dirt below your feet up to 2 tiles, if it can't be raised higher you need to raise the ground using stone, if it's too high you need to lower it with the pickaxe. Save ambitious builds until after the first boss.

Also, you won't get all the materials back from abandoned buildings if you destroy pieces of it such as the floor to remove grass but you will always get back the materials if a player built it.