I’ve finally begun the modeling process, creating assets and what not in blender. I’m currently working on cavern type setting.
Should I do my all of my level modeling inside of blender? Or should I make use of Unity’s terrain editor for a base? Any thoughts?
You can’t create terrains outside of unity (terrains as in “with trees, detail objects and grass”), so the answer is relatively clear 
Depends on whether or Not you want to take advantage of the features of unity terrains. With unity terrains you’re stuck with a height map but you get foliage brushes etc. If I were doing caverns I’d build it in chunks in blender then fit them together in unity.
Sculptris is also a very valid choice for terrain, as not only it doesn’t limit you to height alone, but it -also- creates geometry as you sculpt to keep the mesh more or less evenly detailed.
I prefer mesh terrains over Unity’s built in terrain myself. You may have to do some custom shaders to get it looking the way you want, but it’s a lot more flexible and can be better performing.
In some games, I notice that heightmapped terrain tends to have crisper-looking textures thanks to the textures being drawn on a 1:1 ratio, contrasted with models which tend to stretch textures and blur them some. Does this difference in texture drawing exist in Unity-made games too?
Texture stretching is my biggest problem WITH heightmap terrains! On steep inclines.
If you’re making mesh terrain, you can unwrap it any way you want. So if you get stretching, it’s your fault, unless you’re using world space UV coords to project the texture onto it.