Terrain - the leveling tool does level to where you are standing, but it has limitations. Each chunk of ground is basically a cube and the hoe can level within that one cube up or down a little, but it can't add or subtract cubes. For that you either need rocks to raise ground or the pick axe to knock it down a little. After you do that, the level tool will smooth out the bumps.

Raids - They increase with each boss killed. Some raids are boss+certain creature killed. Your first real worry will be trolls after the Elder plus the first dead troll. After Bonemass you will have to start thinking about flying raids. After the boss you start getting raids from the next level up, so swamp raids after Elder. Good idea to scout ahead before killing the boss so you know what to expect.

Smelter - I've never tried to put one inside, but I do know they started making smoke matter at some point.

Addictiveness - Bwahahaha, they have you now! A couple hundred hours maybe?