when WorldMachine generates a terrain, it does so for a terrain that's typically designed to look good at a distance (at least, I know this is the case for World Creator). So, therefore you have to adjust, and smooth out the close-up detail as Duion suggested, such that the terrain becomes playable.
The reason for this is that WorldMachine aims for realism, and realistically a terrain has almost infinite detail, however we have a limited budget for rendering our terrain and have to limit the resolution of our terrain. Therefore, you typically don't have a lot of detail up close (but you do have some ofc), and then for that fine up-close detail, you use rock models and foliage.
As for the splat-map, it looks odd. You may have to turn it upside-down, can't remember if that were fixed. I made tutorial for exporting from WorldCreator to Torque3D
perhaps, some of it could help you do the same for World Machine.
Edit: also remember that out-of-the-box Torque3D is set to pretty low graphics settings, the shadow you see in your screenshot is therefore of a very low resolution (but looks fine up-close) you could turn up the visible-distance of the high-resolution version of this shadow, to get a better idea of how your terrain actually looks.
Edit Edit: This is also true for the resolution of the terrain itself.