I think you may be approaching it backwards. If you create your stream outline as a terrain itself, and then boolean it with your other terrain, you should be able to cut the stream out of your 'master' terrain and still return to the terrain editor to tweak it (you may have to ungroup the boolean). I think this may also give you better control over your 'shoulders' - you can build them up as part of the same terrain that you use for the stream outline and control the placement. Not in front of Vue to test it, but it might work...:-)