Yeah the Flatten tool is pretty much entirely useless in an all natural world like Skyrim. It works great for Parking lots in Fallout, but that's about it.
Perhaps if you don't want to do it by hand, the 'Raise To/Lower To By X' option would be for you? It raises and lowers the land (Kind of messily) to match the starting value, only in the influence circle, meaning there is no huge fallout like the Flatten tool.
Otherwise you just have to do it by hand, which shouldn't take too long if you're fairly 'rough' with the land, which also often results in a more natural looking finished product.