Hi again, I thought to report my status. Sorry if this may seem as OT for this group, I'm guided by the fact that only here initiated discussion started, and as being indexed by Google, hopefully will save time to other person is similar situation.
GIS flagship gdal, offers topo line closure if source file is DEM conformant, i.e. if I label contours in TIFF bitmap with Z values I should expect good results. But labeling lines with Z values, even if I use tool to automate part of the process will need too much time because of the gaps, which I can use to close the gaps manually instead. Gdal offers Python script `gdal_fillnodata.py` and although my source file doesn't meet the requirements, using this script closed some gaps correctly, but many were left out regardless parameters used.
If I had labeled contours, also other GIS tools could be up to the task (more of less), like for example discussed here:
http://gis.stackexchange.com/questions/44319/how-to-close-multipart-polyline-gaps-in-arcmap and by other means which I'm aware but discard because I don't have Z labeled data. What I'm really surprised is that expensive commercial tools like ArcGIS can't do this out of box! In the linked question Magda (question initiator) reported success by using some third party ArcGIS extension. I don't have ArcGIS but I have a friend with license, and we tried suggested tool. Function that offered gap closure, was poor, in a sense that it just closes the gaps by minimal distance, so if contours are dense result is silly.
I wasn't able to find strictly speaking vector tool, that can help, and I'm still in this quest, afterwhich I'll try programming by hand. That is if I don't loose interest in the process, which if also one of the reasons I thought to report my status ;)