I’ll answer this one despite it being a little out of my league, given that no one has so far given it a go.
I don’t think Blender would have an “automatic” way of making your terrain either… especially given the loops as you say.
To fill in the loops, you could “select edgeloop” around that area. Once selected, hit E to extrude a few times, and then shrink the area a little. The last time would involve meeting all those points in the middle (forming an ugly pole). Alternatively, you could match side by side and use F to complete a “grid”. Very slow though. Once the area is filled in, then perhaps use “proportional / smooth falloff” to pull hills up along the Z direction (use random falloff for rocks).
Now you have all the “loops” filled in via Blender… would TORCS be able to place terrain outside of this?
I’m thinking there must be some kickass scripts for this sort of thing.