That looks nice but without any instructions on how to install it or generate that sample—or even what format of data it wants for the elevation data—I'm not really sure what kind of useful comment I can make on the project itself.
At a first glance, it looks like it only handles heightmaps, while dwarf fortress is more voxel-esque. Interiors might not (currently) be handled by this program.
Wow, this is closely related to what I was thinking of doing.
Tracks in the racing simulator Assetto Corsa are simple 3D model files that have had a few hand modified additions using the editor distributed by the developers.
I wanted to take Elevation data and turn it into a big file of polygons, and then lay a road on top of that using freely available shapefiles that describe roadways, giving the user a smoother surface to drive on. I could either texture polygons using some land use data from the same shapefiles, or using satellite imagery.
You could use a grayscale height map and apply textures based on relative or absolute height. Tallest point on the map? Must be a mountain. Cluster of points lower than the mean or median? Could be a lake or river.
Essentially, it would emulate real world feature distributions.
That is an optical illusion, if you are seeing that. Isometric view is a rectilinear, not perspective view. Apparent object size will not have any change in the z-axis, so there should not be any foreshortening.
three.js is quite well suited to things like terrain generation. There's actually an example in the official docs - https://threejs.org/examples/webgl_terrain_dynamic.html - it wouldn't take much effort to swap out the noise generator for a heightmap.