Madison, i too admire your tenacity, but.....
Did you check out Ebay and view the listing i referenced last night - only $16.00 delivered.
As far as lighting the interior goes, LED's attached to the roof will do the trick, and can be installed only over the area you want lit.
How does the smoke unit compromise the back section which is the passenger area?
When i built my first scratch built loco (a PRR O-1) i found out very quickly that gently pushing it around the track and through a few curves was a lot different than running a powered unit over several hundred feet of track and through a few turnouts. This was a reality check and resulted in me sending the chassis and power truck to Frank Timko for proper re-powering.