Leveling is pretty good but don't expect perfection. If you start in an area where there is only some minimal up and down you are way better off. As noted, the ground levels to match level at bottom of feet - on the ground, not on anything else like rocks or bldg pieces. There will be times when you want to make a nice hillside without making a minicliff. Stand at a 90 degree angle to your road or flattened area and the game makes a nice grade (most the time) unless you are trying to do too much elevation change.
If you get dimples and pimples they can be fixed - pimple with pick and dimple with one fill in with hoe which you can then even out.
Sometimes coming back after reopening the game will allow some last minute elevation changes that didn't work before. You can also try using the cultivator if things start to go south, then go back to the hoe. In the end we are not duplicating the pyramids so a little roughness is to be expected.
Making trails with hoe in the swamp is a great way to learn how the hoe works, as is making trails on steep mountainsides. You can hoe your way across almost vertical slopes.