First step to create an island from the two planes is to select and join both objects (Ctrl+J) in Object mode.
Then check the normals with the Face Orientation overlay. The normals of the upper part should point upwards (blue), and the normals of the bottom part downwards (blue). That is, all faces outside should be blue and everything inside should be red. That's important for the Boolean modifier to work properly.
If it looks wrong, you can flip the normals in Edit mode. Hover the mouse pointer over the mesh and select everything with L (Select Linked), then flip the normals with Alt+N, Flip.
Joined island with correct face orientation
Now add a new cylinder (Ctrl+A, Mesh > Cylinder*) object, in the Adjust Last Operation popup that appears (F9 if you missed it) increase the number of vertices from default 32 to
96 to give it more geometry.
Move the cylinder to the island and add a Boolean modifier to the island. Choose
Intersect, and Solver set to
Exact. Hide the cylinder and disable it for rendering or apply the modifier and delete the cylinder.
For sculpting, you can use the Remesh button (or apply Remesh modifier with operation type Voxel). This will create a mesh with even distributed vertices. Beware, the voxel size depends on your object size. Save before you do remesh operation because a too small number can freeze Blender and generate millions of vertices. I've used
0.05 m for 2-3 m objects.
Of course, you can also create a square or other shaped island in this way.