It sounds like you are building your layout on a dining table, which is confining your layout. If you are able to use more space in your room, a modular layout will help expand your layout and be better suited for break down and storage.
The loop of track on the second level is going to reduce the length of a train. A rule of thumb I like to follow is a locomotive shouldn't follow it's own caboose. Also, you will want to decrease the speed of the train so it appears less frequently. Try to use a view block (dense foliage/scenery height/backdrop) to help the train disappear from view. These tips will help hide the fact the train is running in a loop.
I would move the hobo scene up to the second level also. It will create interest in this area, and hobo's would be off the beaten path out of view of the raiload/law.
Instead of the siding to the mill being located inside the layout, try swapping it with the mainline so that the siding curves from the front edge to the right edge of the layout. I think the mill you want might be too big. It would be better to build one to suit your space. The water tank and abandoned station will seem a little unusual without supporting architecture to show why it was built in the first place, unless it was to service the mill. If it's a station to service the mill, I would flip it to the other side of the tracks. The mill would have a small area to service a steam locomotive with water before it set off from the mill.
