That sure is a fine looking grandson you have. He's really cute! Enjoy them while they are young.
The switch in the mountain will probably be the only one that ever has a problem. But it may recognize all the effort put into it's access and never cause a problem, you never know.
It's hard to give up things you like, but I would listen to your hip. It's about time to start running trains full time anyway and you will soon have that new engineer to educate in train operation. I have a knee, shoulder and back that put me into early retirement a few years ago. I enjoy it, but it's different and takes some getting used to. I still sometimes feel like I should be working, but then I think about my failing joints (they remind me themselves quite frequently) and the thought passes pretty quickly.
As for the basement, I think some of the others here have offered good advice. We moved from our home of 35 years in 2013 to a new, low maintenance house. Our old home had a stone foundation that was always leaking somewhere. We spent quite a bit of money getting the foundation repaired, the patio removed and replaced and the back yard graded, but the leaks came back a couple of years later. I think that had more to do with the amount of rain we had than the work we had done.
The new house has a concrete foundation, the lot is very well graded away from the house and we have a sump pump (first time for one of those). One more thing it has is down spouts that go into the ground to a pipe that goes about 10' or so from the foundation into a basin looking thing with gravel under it and a floor drain like cover on the top (another new to us item). Basement problems can be a real pain and I hope you are able to get the leaks corrected.
I think Grayson will like that boxcar when he is old enough to know what it is. Our grand kids used to like looking at pictures of themselves when they were younger. The boxcar will be a special thing just for him and I bet he will really like it. Good luck and enjoy the little one, he will be in high school before you know it. Maybe he will need some help playing baseball on the way and it sounds like he will have a good coach.