Bob- welcome to the forum. That looks like a nice layout for little ones to play with. Scenery is an open book. You can be as detailed or simple as you like. Tunnels are easily made with the same rigid foam you are using for the baseboard. It can be layered and carved as you like and painted with cheap acrylics. Several guys use a woven cardboard structure and plaster cloth to cover.
This is a before and after of a corner I did with foam.
Bob