I'll add just a couple of things about the neat little Marx #198 locomotives. I'm more familiar with the windup versions, and since they are more plentiful - and cheaper - one of them might be your best bet for an electric conversion.
The 198 came in what I would call an early version and a late version. The example that Gary posted (beautiful set, by the way) is the early version. Marx reintroduced the 198 in the clockwork version in the early 60's. This version came in black, and used either the sparking windup ratchet motor or the riser gear windup motor. In order to clear the riser gear motor, this later version of the 198 has a hump cast into the shell between the two domes. The late version is the most common, and can be found with the keyhole on the right (for the sparking ratchet motor) or on the left (for the riser gear motor). One quirk of these windup versions is that the clearance in the body is tight, and the mainspring tends to put a lot of pressure on the body as it unwinds. Consequently, it is common for the metal cab floor / rear motor mount to be loose or missing due to the plastic retaining studs getting broken off due to the pressure from the mainspring. These can be repaired by either remelting the plastic studs, or - if there isn't enough length left on the studs - drilling a small hole in the center and using a small sheet metal screw to hold the floor in place.
Anyway, I would suspect the easiest and most economical thing to do would be to install a DR electric motor in the late version windup shell, assuming the brake lever slot and keyhole don't bother you too much. Of course, they could always be filled in and the body painted. The early electric version of the 198 seem to be much harder to find.
Hope that helps!