Yes, the e-unit will work. It is a DPDT sequencing switch. The drawback is that at the 2-4 volts that solenoid needs to pick up the next position, the locomotive will make some progress along the track in the previously current position creating a herky-jerky stop-start-stop action.
Discussion HERE on adding the switch for the Williams reverse lockout. Diagram:
Alternatively, you can use a Lionel 103 type(or the similar K-Line) electronic reverse unit and use the provision for the lockout switch.
