Lots of good advice on this page. Like you, I own a refurbished ZW and use it for my Christmas layout. Give some consideration to buying a Lionel PowerMaster for each loop. It helps mitigate the jack rabbit starts and serves as a better circuit breaker plus you can use a CAB-1 remote control for the track voltage, whistle, and bells, a "poor man's" command control. I've purchased PowerMasters used for $25-$30.
Nothing wrong with going with good, old-fashioned O27 or O and making your own ties (or buying from RR Plastics if available). In a 6' x 12' space, you can do a lot with tight curves if you're not going too big on rolling stock. My new layout in 8' x 12' and I don't own anything requiring more than 31" curves. Most of what I own (75-80%) runs on 27" curves. So, my sub/non/semi-scale stuff looks great on 54" and 42" curves, as good as big scale items on 72" curves. Same for your O27 SilverChief and Fleet of Modernism sets....run them on 42" or 54" and they'll look great.
I like my layout and am satisfied. It'd be done if not for caring for ill parents 2016-2017. If I had to do it again, I'd really focus on switches first and go from there. I started with 42" Lionel O27 switches but quickly replaced them all with 42" K-Line O27 switches. Nice upgrade, but I'd probably spend the bucks for better (Ross, etc.)
