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I'd check out Jerry DeBene's ATSF Line thread on Trainboard. He's done a pretty good job of capturing part of the SP Coast line.
Land in the back would be conventional, but I think the water in the back, with slopes directed away from the viewer is more interesting, visually. It also opens the door to background elements like capes, stacks, and other features that would be interesting, while focusing the land features around the track.
When you start sloping terrain down away toward a backdrop the scene looks small. Upward terrain can fool the eye into thinking it's a bigger scene.
+1 Jerrys layout has a very convincing waterfront.
Would you put the water in front, with hillside to the rear ---- or have a beach and ocean as a backdrop? Geography I'm looking at is western, Coast Line-ish....Just looking for opinions...