Hmm, some interesting ideas.
First of all though, decompilers are often terrible. The general problem of decompiling a program is actually an example of a non-computable problem. However, compilers produce far from "general" code, so you can usually at least get partial results. However, most decompilers pretty much fail with anything more complicated than a "Hello World" program. It might be alright for a single function, but I doubt you'd be able to decompile the whole exe, and get source that could be recompiled to do anything useful.
Apparently the source code was destroyed. It was never leaked.
You can easily change terrain mid game. I believe the Map class has the functions you'd need to set the new terrain tiles (and cell types).
I'm going to recommend the OPU version for modding work. I've done most of my disassembling using something pretty close to a base official Sierra install. A few mods were applied to make running the game under a debugger a little easier (no-CD, GDI draw), but I usually didn't use the latest release. Mind you, that's mostly because I didn't want to bother upgrading my working copy to whatever the latest release was. I also didn't want to get confused by stuff other people edited. I also liked being able to open level DLLs with OllyDbg without it complaining because of op2ext.dll that got added in one of the modded releases. If you're just working with the main executable, then that really doesn't matter though. At any rate, you'll probably want a no-CD, GDI draw patched exe to work with at minimum, which means non-Sierra released.
I suppose you could mod the population growth model using code overwrites, or code hooks. It's not exactly a trivial mod, or something I would recommend for a beginner, but we at least know the relevant addresses. Perhaps also as important, what would you change it to?