A good black Sharpie works for small nicks and scratches and there is nothing wrong at all with doing that in my book. For deeper scratches, try something as simple as Testor's black or flat black, depending, and a fine detail brush. It may not match perfectly, but shades vary in my experience, even among recent Lionel models, much less those that have faded over years of use, and any fill in of a bright-metal scratch with black makes it much less prominent to the eye.
As to when it's more than scratches, I typically respray the entire loco rather than try to match one new section against the old. Sometimes I remove the body but often it makes sense to just spend, say, four hours masking the loco carefully and in detail, rather than take it apart. Here, I always use rattle cans from Ace or Lowes hardware, etc. I buy BBQ (flatter than flat), flat, satin, and gloss and through that and how I spray, try to match the original if that is myh goal, or the look I want if not.
Recently however I did one match where I did not spray the entire loco: I removed/replaced the top and sides of the cab on the new Lionel Legacy Berkshire - why isn't important here - anyway, by first playing with various options (testing four or so rattle cans bought at Ace, Lowes, Home Depot, etc.) on test samples, I found one that matched the color and patinia of the Lionel paint perfectly (Ace Hardware store brand satin, sprayed rather heavy and wet) and used that