Not necessarily. There may be pyrolysis, or vaporizing lubricant. I think it would be awfully tough to start an actual fire with a small-scale model loco. You might get high temperature, but the amount of heat would be quite low.
Lionel smoke units don't use fire. They just vaporize oil.
Model locos work fine with really basic control. I built a throttle a little while back with a TIP120, a 5k pot, a few resistors, and the transformer and rectifier from an old MRC Ampack, and it worked beautifully. My Railpower 1300 seems to be the same design.
Some use an automobile bulb for current limiting. Hook it up in series with the load.
12v nominal has been standard for a while. Of course, a pack needs to develop more than that on no load. There will always be voltage drop. Then you have MTH and their absurd ways. The less said about that the better.
Cordially yours: Autobus Prime w/minicon Farebox.