Is twice around the tree possible in a 3 by 5 space?

I think you'll like your Polar Express.  As you will see here, it is a popular set and some members (notably CandO but others too) have done a great deal of customization.  I love my set too and look forward to running it every year.  I do have a couple of suggestions on the upgrades...  Opinions do vary but I would hold off on purchasing the TrainSounds tender.  There may be better options like a 3rd party sound board as an upgrade to your existing tender.  I'd suggest doing some forum searches on "Polar Express" and see what you find.

As for the twice around the tree plan, 3x5 is probably a bit tight for doing it with FasTrack.  In order to have an "inner" O-36 loop, you will need to stretch the "outside" one to accommodate it.  That will take you closer to 4 or even 5 feet wide and will also require stretching the "outside" length.

I found that even adding an extra 10 inch section (or two) on each end of the oval and a 30 inch piece on each side really helps add to the enjoyment of running the train if you have to "settle" for a simple loop.

FasTrack sources...
Someone here was doing an Excel spreadsheet comparing the various stores.  My best advice: DON'T PAY RETAIL!  I get the bulk of my track from Wild Bill's Trains in Clinton Twp., Michigan.  There are others that offer a significant discount on the price of the track.  Shop around.

No because the 036 curve is 36" from center to center.  Gandalf is right, you might be more 4x5 or closer to 5x5

Thanks for the help I very much appreciate the advice..Ill go back and measure out the dimentions maybe I can come out a foot from where the tree will be .If not ill do the ten inch section add on..It sounds like you guys know alot more about this hobby than I do so ill be learning as I go .Thanks again..