Greg,
To answer your questions and not necessarily in the order they were asked: The 315 was not turned on the 'Y' at Big Horn, it merely took the siding to let the regularly scheduled train pass.
The purpose of the train on September 27th, was strickly for fun. There was never any intention for it to be "historically correct". Its main purpose was to let as many as 32 people ride a real freight train and be able to view it from a caboose cupola. The feel of riding a freight had to have been there. One could sit in the foward cupola and watch the engine crew work or ride in the end caboose and watch the train. People just like riding in a cupola.
Because of the time of year there were not any passenger coaches available, not that we would have used them anyways. Another point of the trip was to get the 315 back to Chama along with some of the freight cars that were used during the previous excursion.
As far as the white flags, I would rather not use them, but the railroad insists they need to be there (FRA rule). But I do agree with you, the higher mounting does look better, and the flags on the last trip were much dirtier to boot.