I wonder how to create .obj in blender and import it into unity. How can I incorporate this .obj and apply height or bulk ...

Why do you want to import an obj file into Unity for terrain? If you want to create terrain externally it's best to import a RAW heightmap file versus a OBJ file. Main reason being performance. If you import a highly detail terrain mesh into Unity you'll probably have hundreds of thousands of vertices. The terrain system Unity utilizes is more optimized and can work with your custom terrain if you use a heightmap instead. You can also edit that heightmap in Unity as well. This was covered near the end of this course.

thank you

My previous question about rotating the terrain was answered in http://answers.unity3d.com/questions/15043/terrain-rotation.html, so please dismiss. Thank you, but I will try and play with terrain to see if I can create an arch, as I will try in blender. Will creating a terrain in blender work within unity as for applying unity to the .raw heightmap? Thank you

You can combine 3d assets with terrain created in Unity. A lot of people do this, and it's not really specific to Unity itself either. You can use the Unity terrain for the simple base terrain and add more complex terrain scenes that are comprised of 3d meshes created externally.