I'm going to be a little different. I would recommend using the Z1000 by MTH VS a Lionel CW80. Another option I could endorse is a a William/Atlas 80 Watt.
Here's the logic and reasoning behind my answer:
#1 You are starting out with a semi postwar designed engine still using the larger universal AC motor. These tend to be higher inductance and rather electrically noisy. Many modern electronic controlled transformers (The CW80 both old and new, and the Zcontroller of the Z1000 set) use transistors to modify the fixed voltage of the core transformer. The point is, this engine produces voltage spikes back towards the transformer. Any derailment or short can produce spikes- but specifically these older traditional engines can create harder spikes. They were also around when many of the transformers (postwar designs) had no electronics other than a brute force metal oxide diode- that can withstand the abuse from voltage spikes. The point being, that derailment short, and large inductive voltage spikes created by this style of engine and accessories in my opinion is riskier for an electronic controlled modern transformer.
#2 I'm specifically saying the MTH, because in the event of damage, you can just repair or replace the Zcontroller portion. In fact, MTH parts and sales actually has the complete board ready to drop in today in case of a repair.
#3 There is significant value (bang for the buck) in MTH engines and seeing that value, you may eventually add some to your collection. It's been my experience the recent Z1000 and Zcontroller are more compatible IMO and experience with MTH PS1, PS2, and PS3 engines running in conventional.
Counter that with Lionel CW80 is a different beast. Lionel does not list or carry a single part for the CW80 new or old versions!!! You read that right- the traditional argument is, Lionel is better because of support and parts- except it's not, and definitely not in the case of the CW80. Further Lionel used triangle security bits, a glass fuse between the control board and core transformer, so there are tons of cases where a user blows this internal fuse, and it's a whole process just to get around the security screws to replace a fuse that is not in a fuse holder- Oh no, it's in series wired under heatshrink. To be fair, I have provided info and detailed teardown of the new CW80 and transistor replacement, but if the board is further damaged- there is no replacement board.
https://ogrforum.com/...80-disassembly-tools
https://ogrforum.com/...9#161631098285667179
Again, I also recommend the Atlas/Williams relatively recent 80 Watt (several years old now and no longer produced but still on the used market). This is because this is a hybrid of postwar wiper style voltage control of the core transformer but also has modern bell and whistle buttons. It bridges this gap between new and old quite nicely, and doesn't come up often enough in these transformer discussions.