Well, as I'm not able to create whole tut on this right now, I can only give a couple of tips on this. What I'd do is not to use the drape tool in this case but the stamp tool like the steps below:

crete the terrain as you have already created; use the contours of the road to create a face (hopefully they are coplanar and forming a closed loop) move it down to the highest point of your terrain divide the face with additional lines and/or use the autofold feature to rotate the other parts of your road face as close to the terrain as possible - but only in very general when you're done and the road is smooth enough (but obviously "floating" above or "submerges" below the terrain, select all and use the stamp tool to integrate it into your terrain. soften edges where necessary
In the "realy world", roads are either running higher than "valleys" or cut into hills so that they don't beed to follow smaller details of the terrain. This will be the result with your road, too.