Rockershovel, to add to what PaperTRW said:
You've mentioned using a 12v DC power source before. Is this a constant 12v unit or a variable output such as a power pack? Obviously with a constant 12v to the track, you cannot regulate your locomotive speed. And depending on the length of your train, the loco may slow down on curves or simply struggle to pull the train. Also, 12v might not be enough current to activate the whistle tender, hence why you hear the "coffee grinder" sound but no whistle sound.
The "reverser" you refer to is actually in the locomotive. It is basically a circuit board version of a mechanical e-unit, but it has the capacity to allow the engine to run on either AC or DC current.
The tender does not have a "reverser" but rather a circuit board version of the older mechanical relay. Which means when running a postwar engine on AC current, you hit the whistle lever on the transformer, and that sends DC current to the track which activates the relay in the whistle tender. The modern circuit board relay does the same thing. You can run the tender on DC current, but will have to check the polarity to the track: One way will make the whistle blow continuously, the other will not. The reverse circuit board unit in the engine isn't effected by the polarity to the track. I know this because I have the option of running my own layout on either AC or DC current. And despite belief to the contrary, there are items thought to work only on AC current, that will also operate on DC current, such as the Operating Barrel Car and the Operating Milk Car.
Back to the 4-4-2: The one drawback of these locos is that they are kind of a pain to work on. The front guide truck, the rear trailing wheels, the smoke unit and the motor/reverse unit/drive wheel assembly are all separate pieces that have to be inserted/assembled/aligned correctly. Though practice at this makes the task easier.
Now personally, I kind get annoyed at the word "cheap" used to describe starter sorts of products. I know you didn't mean anything bad by it. Yes, there obviously are cost saving elements to starter products. But I have a couple of these locomotives that are now over 30 years old and still run. I've never had any defects with them out of the box. Yes I replaced a puffer smoke unit after 13 years: That could be expected.
Meanwhile I've messed around with the newer fan driven smoke units for some projects: They work for a few minutes and then stop. I pull them apart, check them, put them back together, mount them in my project. And again they work a couple times and then stop. Those fan driven smoke units are the garbage: I'll stick with the puffer units any day of the week. No trouble with those. And using Lionel Premium Smoke Fluid makes a real difference in their performance!
On any given day there are usually a half dozen threads on this forum about high end, expensive products that didn't work out of the box or all of a sudden, are unexplainably not working. So maybe "cheap" isn't so bad. I run trains for fun, not frustration.
On another side note, Richard Kughn, one time CEO of Lionel said that those 4-4-2 starter sets were the single best selling item during his years at Lionel. We're talking production numbers like tens of thousands at a time: Not a couple dozen to a few hundred like most high end scale products. Not a bad achievement for a product often disrespected by some on this particular forum, where they deserve to be mentioned and praised.