I am assuming that you have the LionChief version.
You are correct. The supplied wall power pack would become insufficient with additional cars or track.
I prefer to run the train with AC power, but I use a modern Lionel transformer with a fast acting breaker. If you get a derail using the postwar ZW, the electronics can be fried.
I am surprised to hear that the set arrived with that many flaws. That's not typical.
There are several options for a power supply. Just find something recent.