Horizontal scale: There is no way to cheat.
TransDEM makes every effort to obtain correct scale, to enable all kind of different geo data sources to fit together and to retain this information even in the Trainz route, through its static UTM baseboard mapping and the Trainz World Origin object. Manipulating scale would neutralize this effort.
Vertical scale: In reaction to the low quality of first generation ASTER DEMs (2003-2006) I implemented a number of DEM editing functions with the objective to get closer to the real thing. At least one of these functions could also be (mis-)used for the reverse direction: "Raise/Lower Elevation Range".
What I would suggest is to stick to scale wherever possible. If distances between stations become too long, you could shorten them by leaving out a couple of baseboards altogether. You would build your route in modules, merge them where you please, and create fictitious "transition boards" to make the join. If your entire route is on a slope, you can also raise or lower individual Trainz route modules after they have been created, to bridge any vertical gaps.