I've just moved very close to west footscray station (the tracks are opposite my house), never lived near a train line before, although grew up on a flight path!
We have double glazed windows - awesome investment. We don't hear metro or vline trains. However, when the freight trains go past, that's another story. I don't think there is anyway to fix that. We have been living there for 3 months and sleep through the night without problems now. Took us awhile to get used to them though.
My nephew is obsessed with trains and loves coming to visit (so that's another +). He just sits at the window watching them all go past and yells out "that's a blue train Aunty Kat (metro)", "there's a red diesel (vline)", "freight train Aunty Kat, with 3 green engines!" and then when the sydney-->Melbourne train went past he had no idea what it was lol
There's no bells or whistles near us, so I can't comment on them. Traffic does increase during peak rail traveling times, but the convenience of living so close to a train station definitely outweighs that. We save so much money by cycling, catching PT or combining the two everywhere. If you are buying, invest in double glazed windows (if it doesn't already have them) and if you're renting, well there's always crap stuff to put up with in the house you rent If you have an outdoors cat, they can get a bit freaked out by the noise. Our cat has become an indoors cat (used to be outdoors all day while we were at work).