There are a couple of things you might try. (I know the method works. And it's not mine, just something I've picked up over the last twenty years or so.)
1. Try unifying the polyline first, if you need to. You should be able to get the polyline selected with one click. It can have a bizillion nodes. If it doesn't unify, then your surveyor may need to use continuous lines rather than a dashed line.
2. Create a spline from that polyline by using the magic wand. Use "best fit" with a small deviation. The spline can have a bizillion nodes, too. You only care about creating a single spline for each contour line.
3. Change the magic wand to "linear segments," with a segment length of 10', say.
4. Now select the terrain with the splines visible. (Terrain tool must be active.) When you magic wand the spline the "New Mesh Points" dialog should pop up. When you click OK (with "fit to user ridges") you should get nodes spaced at 10' along the spline. Then click on one of the nodes to get the "Mesh Point Height." (make sure that "Apply to All" is checked.)
This goes much faster than the description.
Richard
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Richard Morrison, Architect-Interior Designer
AC26 (since AC6.0), Win10