Hi mojo,
there's a lot of good in your diorama!! Congratulations.
Regarding the tree I can only second you in the intention to use steel wool for the tree canopy! And if you do, make sure to take the coarser one!!!!!
For these trees I used steel wool and commercially available flocking (leaf scatter) (from Noch, Polák, o.s.) over bits of real twigs


they are part of an aluvial forest terrain for a napoleonic demo wargame I held at the Austrian Army Museum for the bicentennial of Aspern-Essling.