The Walt Disney World Railroad changes elevation because there is not really a berm for it to sit atop. The Fantasyland Station is just about the last place the trains can stop before hiking back up to Main Street. In the 1980s there was a good bit of doubt regarding whether or not the trains would be able to consistently make the climb after stopping as it had always been done using momentum to assist.
The real problem isn't primarily the lack of a berm, per se, but that the Utilidors required the elevation of the park at the front so that you have access to Tony's Town Square, and northwards but not to the northern parts of the train track. The Utilidor height is added on to the elevation of the train tracks at the Main Street Station so that guests can walk under, making the grade all that worse. If there was no Utilidors, then the height of the second floor (guest level) could have been lowered significantly when compared to the Fantasyland station/back of the park low point.
The solution would have been to back-fill all the way north to include the train tracks. This would have changed the truck entrance points to the Utilidoors to be tunnels themselves, extended outwards, but what we have to day is a road that is at grade with the Utilidors behind Village Haus. It would have been expensive, but it would have made construction of future lands into the northern expansion pads much easier. You can guess why this wasn't done: cost. (It would be a small additional amount to build a berm so that the train has practically no grade, but this would also have required an elevated Fantasyland station, so yes, in a perfect world a berm would have been built on top of a massive in-fill, though with an in-fill elevating the Fantasyland section of the track to the MS station height could have been done, with a gentle slop that guests wouldn't notice.)
Railroad grade, (elevation) was kept very low for early trains due to power and breaking issues. Even a 1% grade increases the energy required to move a load by a little as two times, and much more if the train is carrying a heavy load. There is a very small grade from Main Street station to Toontown station, and one of the trains, (Ward Kimball?) wasn't powerful enough to handle it!
From an eyeball perspective, the train track around the Magic Kingdom would look practically level, but small changes in grade can make a big difference with the trains they are using. The railroad track is elevated some around the perimeter of MK, but it is not primarily to correct grade.
The Fort Wilderness locomotives had 1% grades to deal with it, and the track was not done as professionally as the one in the Magic Kingdom in terms of using accurate rolling machines, it was done manually, resulting in derailments.
Anyway, you can see why it is perplexing that the Mermaid show building was built on primo real estate in the park, it would have been much more efficient to use the northern expansion pads for a showbuilding, versus later trying to backfill and make it a guest area. A show building for Mermaid could have been built over the road behind of NFL, they could have even used the drop-off for part of the ride: you'd enter Mermaid, winding down a bit through a beach/grotto, then descend maybe 12 feet downwards as part of the ride, a sort of solution for the elevation different here. Remember that the berm/train necessitated some pretty creative solutions for Pirates and the Haunted House which were carried over to other copies of these attractions despite there not being a practical need for them.
The way it is setup, it would be easy to add a Beauty and the Beast dark ride north of Belle's village, they could even put in a theatre for guests to see a show if they wanted. If at some point they go with a ride, I can see a RV/show that uses the descent/ascent to a showbuilding out there, maybe you are in a wild cart pulled by a horse that is flying down a wooded trail towards Belle's village, and then the ascent could be said cart ascending towards the castle, or even up a long staircase inside the castle. Who knows? (If they did go with building a 2-3 story show building, to make the track level with Belle's village, then they'd have an extra floor underneath the track for something . . . they could put in a kuka robot Belle ride probably much easier in this configuration as the "basement" has already been "excavated", i.e. is ground level north of NFL)
Just kinda wish Mermaid's showbuilding was put there, there is room for a couple showbuildings in fact.