I would sat part of the problem is there needs to be a air intake vent above the whistle intake. The shell looks too close to the mechanism and not enough air. Also the Bachmann motor is designed to run at 12 volts, and the circuit board output is about 5 volts. You would have to use a Lionel air whistle motor or smoke unit motor.
You will also get more sound by by-passing the resistor on the circuit board.