Yes, I will be in touch when I'm ready to go with the trolley. The magnet idea could be fun as well.
An arduino is certainly a possibility, and will probably get used somewhere on the layout just for the sake of writing a little code (a big part of the motivation for the layout is teaching the kids, ages 6, 9, and 11, some new skills) but I think for block control and maybe trolley timing it would be fun to just use relays. But I think we will at least use an arduino for some low power things that won't require relays, for instance creating a camp fire lit from below by flickering red/yellow LEDs.
Thanks for all the help! There is a lot of good stuff in this thread.