Since you're already in creative mode, I assume you're thinking about a quick edit shortcut. Sorry, there are no features like that in the console version. Your best bet is to invite some friends you trust into your world and just go at it.
my friends and I have been building a city in creative, that we started back before creative or superflat even existed! . . .Back then we used the old dupe glitch and dreamed about the day we'd have infinite resources. . . GET OFF MY LAWN!! - Wait, er, sorry. got sidetracked a bit
As a result we've racked up quite a bit of experience in mountain removal! First off let me tell you that I'm sorry, but there isn't a quick and easy way to do it, and that even with my method, you may still want to employ the bedrock or obsidian bed trick that everyone above mentions just for ease of cleanup. However if what you're more in the need of is good advice on how to set your TNT charges, I'm the man to come to!
For clear-cutting a mountain, as we've come to call it, what i usually do is walk up to the base of the mountain about where i want the land to be leveled out and fly up so that there's a 3 block cushion between my feet and that level level i want to be flat. I then dig a straight tunnel all the way through to the other side of the mountain. The tunnel should be only one block wide and two blocks tall, just big enough for you to fit through, and must be in a perfectly straight line! This part takes the longest time and really is unavoidable in the long run so you'll kinda just have to bear with it! once I've cut my tunnel through the other side of the mountain i travel 5 blocks to either the left or right of that first tunnel and dig out another tunnel exactly like the first running parallel with it until i am back on the other side. Repeat this process until the entire bottom level of the mountain has tunnels cutting straight through it, then fly up another 5 blocks and start a new line of tunnels. Keep doing this until you reach the top of your mountain.
It's important to note now, that once a TNT block becomes primed it is affected by gravity and can be moved by the force of another explosion, this can severely impact your controlled demolition so be sure that you place all of your TNT blocks on top of another block! Naturally, in the course of drilling your blasting tunnels you are going to intersect caves. To keep the demolition as clean as possible you'll want to place blocks down where the floor would normally be to bridge these gaps! Dirt is destroyed very easily and can cause TNT charges to fall out of place if you use it for this, so i recommend using Stone to fill in these gaps. I usually just create a thin, 1 block strip of stone that connects one wall of a cave to the other. I don't bother with sides as I've noticed that it doesn't make too much of a difference, really. The blocks just need to be able to explode roughly at the height you set them.
Once all of the gaps are bridged you can finally begin placing your TNT. I'll warn you right now, that it is very, very easy to crash the game and freeze your box while attempting to bomb a mountain flat! This is also true on the PC and is just part of the nature of the game. What we are about to ask your poor machine to do, could be considered a war crime against all AI-kind if a robot invasion ever does occur! That being said, lets blow a bunch of stuff up!
Save now, before you place even a single TNT block just in case an accident occurs! Nothing sucks worse than seeing hours of tedious drill time lost due to an unforeseen accident. I once lost 4 hours of demolition work due to a lucky strike during a thunderstorm! I had turned autosave off when a friend of a friend wanted to tour our city just in case he turned out to be a griefer and forgot to turn it back on. A terrible price was paid - hours of work and $40 for a new controller. . . .I don't wanna talk about it. . .
Be careful when placing your TNT not to have redstone torches or any other powered redstone devices anywhere near your mountain. If your explosions go off prematurely you may have bought yourself a 1-way ticket to crash city and a long walk of shame down the aisles of Walmart with a replacement controller tucked under your arm. . . .Somehow, I swear that cashier knew, man. She just knew. . .
When it comes to actually placing the TNT you want to set each block on the bottom half of your tunnels being sure to have some kind of block under each one, as i told you before. It's best to do this in sections depending on the size of your mountain. When doing this i recommend starting from the top, and working your way down! I can usually detonate around 15-20 lines of TNT safely at a time, however you can get away with setting off more, if the length of the lines are short, or if you simply don't look at the explosions. Seriously, cool guys don't look at explosions! The practical upshot of this is that not having to render the particle effects and the changing landscape makes it easier for your xbox to handle!
Always save before you set off any explosives, just in case something goes wrong and you need to adjust for it!
Once all of the tunnels have been detonated, you're left with just a bit of cleanup, so put on some enjoyable music and get to busting up the bits that remain. Most ghost shadows will disappear after placing a torch down and forcing the game to recalculate light levels, or if that fails, a quick save, exit, & reload! I've only ever had a few remain after a reload, and even they eventually vanished in time. Not sure why it takes some shadows a few save and exits to fade, but it just does. I usually don't worry about it as I've never seen one stay permanently.
Hopefully this guide can be of some use to you. If you get confused on any of my directions, just let me know. If you're more of a visual learner, I actually do have video captured of a friend and I using this method to take out a mountain that I can upload to Youtube for you to watch.