It's not uncommon for historic railways to include an appropriate model railway as part of their displays. However, I think it'd be much more effective to have a model railway which is an accurate model of the real railway, and make the model trains track the real trains. You could compress long uninteresting sections of track by just running the model trains slower over those sections. It'd be interesting to do this for a section of the London Underground based on the train timing information that's already publicly available.