Lionel electric railroad cruise lite upgrade

I would NOT connect the smoke unit across the motor!  You're trying to drive the smoke unit with the motor drive FETs.  First off, the motor voltage will be too low to get any smoke anyway, and you'll also be working the FETs too hard if you're running a full speed with the additional load of the smoke unit.

The chuff switch normally just gets glued to a tender truck close enough to a wheel for the magnet glued to the wheel triggers it, but can't hit it.  It's a somewhat hit-or-miss adjustment, and I had to shim a number of wheels to minimize the side to side slop so the chuffs would work well.  Nowadays, I just use this Chuff-Generator board on the locomotive motor to generate a programmable chuff rate, no more gluing magnets and reed switches to wheels.

Lol, some dude posted a YouTube video doing it that way. I was like - anyway, I was hoping you would answer.

This is one of the small started set steamers with horizontal motor and no fly wheel. Or I would be using your board in a flash.

Just shim the wheels if they move side to side too much and go with the magnet and reed switch.  It comes with the ERR RailSounds Commander kit.

ack, to the ceramic caps. Think, I should remove them?

I'd remove any caps on the motor, they are not specified for any of the ERR Cruise products.