"But is it that hard to remove the background and water areas from an svg? Each of them is contained within its own group which effectively should work as Photoshop layers (just a guess really)."

If you export SVG and open it in AI, it shouldn't be so hard, although still tedious, if you have to run AI in the first place (or even have it on your PC, which I btw don't). In Photoshop, the problem is that colors used on different elements are similar, which means that when you use magical wand, you often get pixels around borders. Lets say you use wand to select gray houses - well, it will gladly select some gray pixels produced by anti-aliasing around black walls. One may say "oh, just reduce tolerance!" - nope, that way you just loose anti-aliasing around houses you wanted to select. So the only way out of that I am aware of is selecting said element with magical wand and then running around image and deselecting by hand parts which were selected, but are unwanted. Which can be done and is what I am actually doing, but it makes whole procedure couple of minutes longer. Apply those couple of minutes to 20 maps when doing some larger scale worldbuilding and yeah, thats some time spent by annoying pixel deselecting. But if there's no easy solution, thats fine, your generator is still by far the best I found so far!