My Arduino circuit and code was also for traffic lights. It greatly simplified the other method using a 555 & 4017 that I was fiddling with. That's all I have really fiddled with so far using an Arduino though. I have some other sensors for Arduino which I got to try and learn more, but have yet to attempt to do anything with them.
I have not tried it, but I think something similar to the traffic signal could be adapted to signaling with an input from some type of train position detector rather than just using timed sequencing for the lights. I think you could probably make it fairly simple or even more detailed either way, depending on input sensors, locations and quantities used.
