If you want to cancel the terraforming, you need to use the demolish building option. I can't remember which tab that's under, but it's a button in all the other building options and info displays, etc. menu. This is the only way to demolish anything, btw.
I only try to lay out my terraforming plan while paused because I can and will mess it up about 100 times before I get something passable. It never quite turns out how I hoped, but I think that's impossible, anyways. Terraforming will always look ugly, imo.
You need to hold the mouse down and drag the box out to get a bigger size. Once you get the right size in the right place, you're not done yet because you have to adjust the height, which you do just by moving your mouse up or down. You can still move around, zoom in, and hold down right mouse button to pan around while in this mode so you can get a better angle while planning the heights. It just takes a little practice to get the hang of it.
Sorry if I explained things poorly and what I said doesn't make sense. I tried. xD