This is a good conversation. Just throwing out another idea.
Since this came from a DEM file, and from a plotting side you want it to be fast loading, etc.
Whey not create a cogo point grid that drapes onto the DEM, then create a surface from that.
Another idea, would be to do the same, then maybe from the DEM (point surface), explode the line work.
Use that as a basic xref. Then data refence the original DEM in with a surface display set to No Display.
Just some thoughts.