The "A" is the common on the 1033 for use on common ground layouts. "U" has the throttle, direction, & whistle/horn controls all for the center rail power, so that should be connected to Lockon Clip 1 for running trains.
You are at or near the 4.5 amp capacity of the 1033, so running warm is normal with that load.
Hi Rob, I am confused by your post. All the diagrams I have of proper connection of transformers shows the U terminal going to the number 2 lock on terminal which connects to the two outside rails. It shows the A or B terminals going to the number 1 lock on terminal which connects to the center rail. Jim