The latest version of bluetooth is supposed to have better range and higher data capacity. Not sure what version Lionel is using. I have tested aftermarket bluetooth systems and found good range, in some cases over 75 feet. Bluetooth setups I have tested include printed circuit board antennas and external antennas which provide greater range. The Wi-Fi based systems I have tested perform virtually identical to the bluetooth systems.
The version doesn't matter, it's the class of power output of the device.
For Example:
A Bluetooth 2.1 device with Class 1 power output will easily reach 100 feet in line of sight conditions
A Bluetooth 5.0 device with Class 3 power will connect to something about 5 to 10 feet away at best.
Data throughput doesn't matter either, the amount data that is being transmitted over this Bluetooth connection doesn't exceed the throughput of 1990's computer modem. I'd sacrifice throughput for range in heartbeat.
As for WiFi vs Bluetooth Range, Bluetooth was never designed nor wants to compete with WiFi when it comes to "going the distance". My home router with stock internal antennas easily makes 300 feet through walls with excellent signal quality, I've never achieved that range with Bluetooth even in Line of Sight conditions. I have literally run my trains from my neighbors house and watched them on my camera system, no way am I pulling that off with Bluetooth.
Lionel filed a bunch of changes with the FCC the past couple of years and it looks like some of these are due to parts obsolescence on some devices and "Better Performance" upgrades to others. I suspect they are upping the power output on future Bluetooth products for better range but unfortunately for any of our older Bluetooth equipped engines up to now, we are stuck with less than favorable range. I suspect another version of the Universal Remote will have to be designed to accommodate the upgraded power that Lionel wants to achieve.