I'm just wondering it it's possible to create and render a game world in a 3D modelling program, such as Blender, with landscapes and trees and such, and then import it into a game engine? Is that how open world games make their worlds, or do they use another method?
This is in fact how it used to be done in the past and still works in some Engines like Godot that lack a build in Terrain-Tool. It's totally possible to make a terrain in Blender and import it to your engine as a gigantic static mesh. But you don't want to include stuff like Trees in your terrain mesh. Those are better made a separate object. Especially for repeating objects like trees you want to use instanced drawing to not run into performance issues.
That being said, this approach has major drawbacks. You would need to re-import your terrain every time you make changes to it in your external software. When tweaking it you won't see any of the other game objects you placed into your engine editor. For larger maps you would also have to split it into parts, make sure they fit together seamlessly, create LODs etc. Depending of the complexity of your terrain this can get a huge problem. Especially for large open world games this is a 100% not the way to go.
Long story short: Yes it's technically possible, but not recommended unless your project is so small that it won't cause any issues. If your Engine has it's own Terrain-Tool i would heavily recommend you to just use it.
It can work for smaller and less detailed landscapes. But with larger and high-detail landscapes, you will run into performance problems. You will need LOD, occlusion culling and perhaps even dynamic loading and unloading of parts of the landscape. With most engines, none of that can work if the whole landscape is just one block of geometry.
Which is why many 3d engines have specialized systems for terrain rendering. These usually come with their own editors. The workflow is usually to sculpt the terrain in the engines terrain editor, design individual props like buildings or plants in a 3d modeling program and then place these props on the terrain using the editor.