We usually play with about 1/3 of the board covered in terrain. In practice, that's pieces placed roughly 6-12" apart. We have a couple of large ruins, couple of large hills, some smaller hills, some various forests, some walls [LOS blocking walls are very fun, you should try them. They're easy to make!] Most of our terrain is between 6"x6" and 12"x12".
I have encountered boards with too much terrain. It's pretty rare, though. "Too much" terrain penalizes low mobility armies, something I encountered when playing the Guard. Most armies / strategies can cope, but some can't.
In general more terrain is better, but there is a "too much" point.