Would the phrase "Full Steam Ahead" be appropriate to use in reference to trains? I know there where plenty of steam powered trains, but I thought it was a nautical term. Would it have been used by the Engineer (Assuming that is the name for the chief train operator.)?
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From the entry in TheFreeDictionary.com:
So figuratively speaking, you could apply this to anything you like. No rule is broken if you use it metaphorically about things other than ships.
You could use it metaphorically, or you could use the phrase full speed ahead which is more generic and according to google books, both pre-dates full steam ahead and is in more common use.
In answer to the other part of your question, I believe historically, the order would be given by the person in command of the bridge and then transferred by a sort of mechanical telegraph system to an engineer.