Solutions
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FlyIce's post in Flickering tree and building shadows in v2.3 was marked as the answerOk, problem solved. I need to set terrain shadow draw distance to 0, then tree and building shadows stop flickering and become solid.
Of course this effectively disables terrain shadows. Probably this is the terrain shadow bug LM is fixing?
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FlyIce's post in Blurry texture in P3D v2 was marked as the answerI want to add that my blurry texture problem is solved by adding affinity mask = 14 to the Prepar3d.CFG file.
See this for details:http://forum.avsim.net/topic/427301-affinity-mask-setting/page-2