Make the horizon transition seamless

Currently there's a sharp break between the sky and the land/sea. This should instead be a smooth transition, such that it feels as if the horizon is infinite. The main technique to use here is to use fog, so that the further away geometry is in fog, which then naturally blends into the horizon.
This also means that any paged geometry, such as the terrain, needs to be loaded far away that it never pops into view, but then naturally fades into view through the fog.

This is pretty much how all games does it, so any game could be used as a reference.