How to make Smoother Terrain Generation (Using bricks)?

First, you should simplify this code a little.

Clearing the children can be much simpler:

• There's no point to :FindFirstChild if you immediately call :GetChildren
• You shouldn't have the space in the name in the first place.
• You should just use ["Terrain Parts"] if you insist on having the space
• You can combine the two ifs using and to save two lines and a level of indentation
• No need to use a name like num if you aren't going to use it
• You should use workspace instead of game.Workspace
• You should probably use "TerrainBlock" instead of "Terrain Blocks"
• each is one Block; each is not several Blocks
• it's not normal for names to have spaces in them

for _, child in pairs(workspace.TerrainParts:GetChildren()) do
	if child:IsA("BasePart") and child.Name == "Terrain Blocks" then
		child:Destroy()
	end
end

You can iterate over the grid much more easily, too. You don't need i itself, you just need the x and y. I would recommend not using baseplate or width or height because the names are very unclear. I would recommend blockWidth and blockHeight to describe sizes of individual blocks and worldX and worldZ or similar to describe the size of the world.

It's also easier to talk about x and y

for x = 0, worldX, blockWidth do
	for z = 0, worldZ, blockWidth do
		local brick = Instance.new("Part")
		brick.FormFactor = "Custom" -- Use descriptive values!!
		brick.Anchored = true
		brick.Size = Vector3.new(blockWidth, blockHeight, blockWidth)
		local y = math.random() * 4
		brick.Position = Vector3.new(x, y, z)
		brick.Name = "TerrainBlock"
		brick.Parent = workspace.TerrainParts
	end
end

Now, you need y to just be a function of x and z.

There are tons of different ways to do terrain generation. Recently ROBLOX added math.noise which gives you access to Perlin noise. You could use it something like this:

function height(x, y)
	return (math.noise(x / 20, y / 20) + math.noise(x / 35, y / 35) + math.noise(x / 77, y / 77)) * 10
end

....
	local y = height(x, z)
	brick.Position = Vector3.new(x, y, z)
....