They are required and the all paths will set all roads for convoys to bases and all tracks will set all trains to strats.
Then yes you have to massage them into place. Complete all of your terrain and elevations. Add all of your bases and strats and massaging until you like the results. Then do the create all bit. You can manually use rivers with tug boats to feed bases or strats. The same with trains. The create all buttons are heck of convenient. And once you do you will hate the results. All roads and tracks will run in a straight line to the east. So you will have to play with the paths to ease them into your terrain. Just remember the finished path has to be 10 miles long.
Take a look at my terrains riftval and fjordma offline to see how I ran the paths. During the blueprinting stage I mapped base locations and terrain features with an eye to the paths. Once you shoe horn your first few, it gets obvious the massaging you will do. Once you get them laid in, run back down them with your nose about 10ft off the ground. You will be surprised what you find. As for testing, offline the first trains and convoys will launch about 10min after you popup into the tower.
Remember to run the mask tool from the file menu just above the build option every time you set your paths in final place or make adjustments to them. It's the only way to get ride of the trees and bushes the path will sit on. Don't try to maneuver around them. The mask tool is there to make it possible to run them where you want. Also you have to run the mask before you do builds.
If you lay down rivers, the minimum elevation of terrain to lay them on is 20ft above sea level. At the shore line you can taper down to 0ft to blend to the ocean. Check riftval for how that was done.
