A: The best paint remover I’ve found for use on plastic cars is the Scalecoat wash-away paint remover. It’s somewhat expensive, but reusable. Follow the directions and you should have no problems. I would advise you to wear rubber gloves and eye protection.
After removing the paint you many find the original lettering is pressed into the body. This is from the old heat-stamping process used by Lionel. I lightly rub very fine sandpaper over the lettering to remove it. If it’s really deep you may have to use plastic model putty to fill it and then resand.
If you’re going to use Floquil paints, be sure to give the entire carbody a coat of Floquil Barrier first. Cars made of styrene can be damaged by straight Floquil paint.
As for decals, there are lots of them on the market.