I prefer the sand being closer. >_> If you want to make a non-flat version, I would just move the collisions back. Like instead of that front portion where they fight currently, they fight on the center main portion of the boat.
In an early version of the stage I had the collisions on the ship itself but parts of the model kept blocking the sight and the right side had a huge wall that made the stage really awkward to play on.
As for the sand effects, I'm currently using the strongest snow effect from the MGS stage with the MH3 sandstorm texture applied. I'll try putting that one in the back and using the medium snow effect for the front.