I don't see any increase in tank capacity. The only improvement I see in water supply is the large pipe connecting the tanks on each end (although it could have been present on the other side of the loco in the builder's photo too). I'd guess there's another connection side-to-side. The capacity improvements I see are the coal boards on top of the tanks and the boarded up side windows, which I'd guess is for taller coal bunkers in the cab (probably along with pass-through ability from the tank-top coal bunkers. Still requires a coal pusher to go out on top when the inside bunkers need replenishing. Bruce's in-service photo looks like after Mountaineer was assigned to yard service. Note the sand pipe and bell on the near end were removed (why would you need two bells to begin with?). Sand would be necessary out climbing grades, but really isn't necessary in yard service, particularly with a relatively heavy engine.
Another thing noted about track and iron rails - I read repeatedly about the poor surface conditions of the early American railroads and how the Brits always went for nicely surfaced track. So any HAL engine would have been less damaging and rode better for them and would have naturally been extra brutal on our quickly laid uneven track. Add HAL locos to light iron rail and it's about the best recipe there is for constant broken rails. And poor geometry always means faster wear. Modern RRs have the same problems - if you ever ran a 4 axle GE toaster on rough track at speed without wearing a kidney belt it's VERY obvious. Even a poor suspension will ride like a magic carpet on well maintained track, but hit a low joint, a mud pump or a soft bridge approach and you need to be hanging on to something. What you feel in the cab is what the track 'feels' - less than that if you add in the added seat and other cab comfort features. I've never studied the Fairlie engine mounting, but I'd imagine it was fairly restrictive with the constraints of the 'flexible' piping, and at anything over a crawl there's a lot more mass constantly moving around hard against the rail, aggravated by the rough surface conditions.
James' comment about the 4-4-0 becoming less popular with the advent of steel rails is somewhat misleading. It's true that the two events did coincide and were related, but that's incredibly understating things. The average narrow gauge train with an 18C (or two or three) hauled less freight than a single modern freight car. Better rail allowed heavier trains and larger locomotives. Demand for freight movement and its profits was constantly increasing and Engineers were quickly becoming among the highest paid labor. Fewer, heavier engines pulling heavier trains meant more profits and even the biggest post-1900 4-4-0s just couldn't keep up with demand in any mainline capacity. Way more to the issue than simple coincidence.