I have built a couple of 'critters' in HOn30 scale which is the same as HOe. Basically it is HO scale locomotives running on N scale track. Most N scale track does not have realistic tie size or spacing but Peco makes flex track and turnouts which better represent the tie spacing that a small narrow gauge railway might have. The ties are deliberately not all symetrical. The spacing is a bit uneven and the ties have irregular ends.
My critters (see the one in my avatar) use a Bachmann 4-4-0 steam locomotive as the donor for the drive mechanism. The drive motor is in the tender and there is a drive shaft that turns the locomotive wheels.
There isn't much left of the original 4-4-0 when my scratch building is done. This is the original engine:
This plus the tender is all that gets used in my critters. Actually, the side rods get discarded too:
Here is one under construction:
They are DC. There really isn't any space for a decoder unless you were to add a second gondola. The wiring would get a bit complex if you were to attempt that. I think the biggest problem would be the stiffness of the wires which might cause the gondolas to derail.
Dave