I want my creeks and rivers to actually be in the lowest part of the terrain I am seeing. Is that too much to ask?
In that case, there's something else you might try.
In your main sim folder, (C:\Program Files\Microsoft Games\Flight Simulator 9) find your Terrain.cfg and make a back up of it somewhere safe. (Just in case) Then open the original with notepad or wordpad like you did with the FS9.cfg.
Once there, somewhere near the very top of the document you should see two entries similar to these:
//Stream Lines
[Texture.1024] //
