I have used Global Mapper quite a bit to generate contours for import to SU. The largest I have done was about 2000 acres. You may want to play with the contour interval to speed up SU. I generated a terrain model with 2' contours on 2000 ac. SU ran all night. When It was complete, I had to zoom WAY back (really far). Good Luck, sounds like a cool project.

I did some comparisons by generating terrain meshes using various other methods including the from scratch sandbox tool and the strange speckles were present in all of them. Thinking it might have something to do with my computer, I tried it on two other machines with different operating systems with the same result.

I turned on hidden geometry and zoomed in as close as possible with the aid of the screen magnifier and was able to determine that it only occurs when two lines come into contact with each other on a parallel plane. As the model is rotated or moved and the lines come apart again, the "speckles" vanish again.

It appears to be a Sketchup bug of some sort.