Marc, there's no (real) magic in Terrain Sculptor. Currently, it creates flattens, period - albeit in a very friendly and flexible manner. So, the first question you need ask yourself is "Do I want to use flattens to fix what's wrong? And, if I do, am I likely to be happy with the result?" If the answer to both questions is yes, then TS is the tool for you.
TS can cut a hole in flattened terrain, but creating a lake in that hole is up to you. TS can get rid of cliffs, but it means you'll have to recreate the terrain on both sides with flattens. Same with mountains. As for modifying shorelines or stopping water from washing over islands, no. Those processes have nothing to do with terrain elevation - unless you want to remove part of the island.
You need to understand that flattens are not the ideal tool to control terrain elevation over large areas and may not produce attractive results. Nonetheless, they can be used for this purpose. As in most things FS-related, satisfaction is directly proportional to the level of effort and attention to detail. If you are happy to replace a cliff several miles long with simple slopes, TS will do that, easily. But, if you want realistic undulations in that slope, be prepared for a lot of work (much less than you'd have with, say, sBuilder, but a lot nonetheless).
My suggestion? Give it a try for one of your issues. It shouldn't take you long to decide whether TS is for you.