Glad I could help you  starting out in the hobby!
The left handle on the 1033 transformer operates both the reverse function of the locomotive, and also the whistle in the tender, so you are safe to purchase it if you desire. The smoke operates all the time, and there is no switch to turn it off on these older locomotives. The lever on top of the locomotive allows you to either sequence the locomotive direction, or to lock it into one state. With the e-unit lever (which is what it is called) in one direction, when you operate the direction lever on the transformer, or turn the transformer power all the way off and back on again, the locomotive will sequence to the next position of the e-unit (an electro-mechanical switch inside the locomotive-see the service manual for its location and shape). The locomotive will sequence Forward-Neutral-Reverse-Neutral-Forward, etc. You need to operate the direction lever on the transformer, or turn it off and on to sequence one position. The other position of the e-unit lever will lock the e-unit in the position it currently is in. If the locomotive is running forward, stop the locomotive, move the lever to the opposite position, and now the locomotive will always run forward, even when you operate the direction lever or turn the power off and on again. This way you can lock the locomotive in forward, neutral, or reverse if you want.
Time to get some track, transformer, lockon and wire and set up your layout! Have fun!

Larry