I recently downloaded ~20 elevation files and ran geoconvert for levels 7-14 resulting in ~55,000 elevation tiles. My next step is to get 1m resolution scenery files for the same areas and also run geoconvert for levels 7-14. Is this the correct approach for scenery files or do I have to adjust the coordinates to snap to the FS2 grid?
that's correct. But if orthophotos are available for free with a good quality from USGS, I'd use them instead of FSET.
elevation files with 1/3 arc sec or 20 m resolution only make sense from 6-12. If you can get 1m elevation files, I would convert from 6-14