I have a few bits of info. i have created a height map myself. and used the water.xml from a generated world of the same size. it works for the most part. here is what i have found out so far.
in the water.xml there is a lot of listings for water. so it tells me its not just one level of water at -1 like it used to be. its broken up into sections. each one seems to be about 20 blocks a long the z axis. the x axis seams to be infinite.
Don't quote me on this info, as i was sick when i did the science. so given the correct info, we could create a water.xml that could work for most custom worlds, given that the y value of the water was the same for all water entries. if you need like a small lake at the top of the mountain, that would require its own special water entry. but for the most part, sea level will all be the same y value.
so in conclusion, if you created a water entry for every 20 z blocks, for the full length of the map, say 8192 that would be 410 entries. and they should allow for water at any area that is below the specified z value. i actually had towns and stuff at the bottom of the ocean during one render, and with a proper scuba mod, that would be fun to explore a water world. (<- all credit to McTaco if someone uses that idea.)
also one time i messed up my height map and the land was like 20 blocks above each poi, so i had to dig down to reach any poi it was... interesting. (<- again, credit to McTaco if someone uses this idea )
As far as roads, i was made to believe it was a simple as editing the splat3.png
problem is, its just not a black background it is transparent. and when i edited it, putting transparent as the background, the entire world was a road lol.
so until someone finds out more info in regards to that, perhaps I'm missing something and there is a layer order or something, i can only suggest using a splat 3 from a different render