Perhaps you could include (additively) the effects from all high points. As you get close to a "parent point" (the top of a "hill"), include effects from the other points less and less. I would say... for the closest high point, include your effects as you've done. For every other high point, add in their quadratic effects multiplied by the distance between the current point and its closest high point (divided by some constant determined by testing).

I *think* this'll give you a nice smooth transition between points. If you wanted to make sure you could write it up algebraically and take a derivative. The function should at least be continuous; it should be nice and smooth in the end.