"I've heard that many K-Line products are interchangeable with Lionel parts."
@TAGurit13, you heard wrong. The parts certainly look similar on first glance, but I assure you most of them are subtly different. Like in the case of the basic motor truck used by K-Line on their starter line of diesels. They look just like the Lionel motor truck assembly, but there are LOTS of subtle differences. Most notable the number of gear teeth on the Lionel DC motor and the K-Line DC motor. So you can't just easily swap out motors and have them work.
On the same type of locomotive, you can swap out a basic F-N-R Lionel e-unit AC/DC circuit board for a K-Line one. But the wires are all different colors, so you have to figure out where they properly go. And the lockout switch is different between K-Line and Lionel boards, so you may have to just cut that off and lose that feature. And the boards themselves are different sizes, so you cannot simply use the K-Line board mount to secure the Lionel board in the locomotive without making some alterations.
In the case of couplers, the K-Line knuckle rivet is a larger diameter than the Lionel one. So you cannot use a K-Line knuckle and rivet in a Lionel coupler, but you could use a Lionel knuckle and rivet in a K-Line truck. BUT then there's the issue of the shape of the underside of the knuckle that engages with the armature pin. The thumbtack coupler armatures are also slightly different between the Lionel and K-Line trucks.
So in summation, it's not impossible, but be prepared to get out the Dremel and having to do some cutting or grinding to make parts work. The shorter coupler arm parts K-Line used for their S-2 switcher and Alco FA2 have long been gone. So I've used other brand parts, but absolutely had to do some grinding and cutting to make them fit.