I gave my two sons' families a starter set (Lionel LionChief Pennsylvania Flyer) for Christmas, when the kids were about 2 years old. They all still LOVE when Dad sets up the train around the tree. For awhile until the parents asked me to stop, I gave each one a Christmas car, with "From Grandpa, 20XX" written on the bottom.
My grandson (now 5) has been parent-limited as to TV, and especially video usage. He has NO I-Pad, etc.
He is still fascinated by trains, and loves to visit Grandpa to run Grandpa's trains on (what he calls) a "real train set". He also sets up HUGE, elaborate wooden train set "layouts"- sometimes through three or four rooms in their house. He sends me videos, or Facetime calls to show me his latest creation.
When at our house, we play a game- "Hide the muscleman"- I bought a cheap plastic male wrestler figure, about 3" tall. He hides it anywhere on the layout (not in a car or building though- has to be in plain site although can be behind something). We alternate- with Grandpa, and/ or Dad having to go around the corner or in the bathroom while he hides the Muscleman) then we alternate. This will go on as long as his Dad and I will play.
I periodically give him train cars to take home at the end of the visit- last was a crane and crane tender.
For one week at home- he refused to drink anything but water- reason : "I am a steam engine, and my boiler uses only water."
The magic is still there- we adults have to be willing to feed it!!