Well, you should start by removing most of the trees. After that you should use the raise/lower tool to make some cliffs here and there, nothing too big, just small ones, like in most forests, then you should start placing trees and, trust me, you should only place a maximum of 4 in a 600 AoE. Also, place them randomly, not in patches as that really takes away from the natural feeling. If you'd like to add more detail, make some kind of shrine or well located in the forest, it is the goddess' forest right?
Anyway, you can also add small clumps of rocks here and there. For the houses, just make them feel natural, not like they've been built in a perfectly fitting tree hole
.