Hi and welcome to the forums jcleaver
We are happy to have you on this journey.
The vegetation system currently does not have the ability to put physics on the trees. You would have to place an entity with physics around the trunk manually. However, the vegetation system is about to get an overhaul creating much easier spraying and of course physics on the trunks. The PhysX version we have at the moment has a limit of 65535 rigidbodies in the scene at any one time, whereas the PhysX 3.0 that we will be adding next year has an unlimited amount i believe.
The trees are also not selectable as they are built into batches for performance reasons and rendering of large forests. This is a feature for the next vegetation system and has been requested by a few users.
The terrain is also in a phase of redevelopment and one of the changes we will make is to show the terrain in the entity list with an easy selection to open the terrain editor panel.
Skyline is in Beta, so it is constantly evolving and changing to get better features all the time, this means though at certain points that the engine has features which are lacking. We are on it though