Design suggestions

I think the first rule when you have questions like this is to check out the competition. Look at a variety of racing games, e.g. the Need For Speed series, Trackmania, Motorstorm: Pacific Rift, some rally car games. They use things like buildings, roadworks, ramps, natural environments, destructible obstacles, uninvolved vehicles, power-ups, etc to make life more exciting. Be creative!

Personally, as far as fun tracks go, I like a mix. By that I mean that some tracks are designed to where vehicles that have a high top speed have the definite advantage and others are very twist, giving vehicles that handle well and accelerate quickly the advantage. I think the Gran Turismo series has a good balance of track types. Some are actual race courses that are high speed tracks and others are very tight, technical tracks. Gran Turismo 5 actually has everything from NASCAR to kart racing, so different race types is definitely something that can be considered in order to make things interesting.

[size=2]Disclaimer: I haven't actually looked at your game, but from the description feel able to give input anyway.

1. How do i fill the environment in racing games like in my case? It feels so blank and empty with just 1 sky-box. All i can think of is some buildings.

What might you find in a real environment? Pick a location for each track in your game, and fill it with things that would be in that environment. If a track is located in the city you might have buildings, trees, mail-boxes, chairs & tables, pedestrians, etc. A country track might have some cows or horses, plants, farm equipment, etc. You can also make your skybox more interesting by adding planes, birds, blimps, whatever as appropriate.

2. Are there any tips and tricks for making levels / tracks fun? All I could think of was like turns and jumps

Think about what players can do in the game, and then design the tracks so that all of the skills are used at some point, preferably spread out. You also want some variety in the experience -- you might have a series of tight corners that really test the player's ability to steer and control their speed, followed by a straight where they really get to accelerate, and then some wider sweeping corners where they can still overtake if they take care but need to watch their steering. Things like jumps, destructable obstacles, or terrain that can slow the player down might add more variety.

Where possible, also offer the player choices: do they take the risky but shorter path, or the longer but easily driven one? Do they go over the rougher terrain to save travelling as far, or all the way around the track? This can be especially effective if there is a choice of vehicles which handle different actions better or worse.

3. I have put fence around the tracks so that player / AI don't fall off. Is this a good idea? I wanted floating tracks and hence this issue.

You could consider using this to influence difficulty -- easy tracks (or easier sections of tracks) might have a fence, whilst more dangerous tracks or sections won't. You could also have fences that can take one hit and keep a player one, but then fall off and potentially prove dangerous for following players.

If there is no fence it might become a tactic to try to hit your opponents and knock them off.

You could consider using this to influence difficulty -- easy tracks (or easier sections of tracks) might have a fence, whilst more dangerous tracks or sections won't. You could also have fences that can take one hit and keep a player one, but then fall off and potentially prove dangerous for following players.

If there is no fence it might become a tactic to try to hit your opponents and knock them off

One of my favorite tracks on Mario Kart was the Rainbow Road, where if you left the track it didn't just slow you down, you fell and were reset back to a checkpoint. This made multiplayer races lots of fun because, as you mentioned, a favored tactic was to knock/force your opponents off the track while also making single player races challenging because you had to actually drive the track and not cut corners.

Thanks everyone.. I had never thought about destructible objects and knocking players off before..

Also, I found Hot Wheels postmortem here http://blogs.unity3d.com/2012/01/26/london-unity-usergroup-8/ which was also every useful, hope it helps someone...