Improving Setrack points

Not really. It would wear off pretty quickly, isn't that conductive and you would risk shorts because the points aren't meant for live frog operation.

The problem is the short fixed wheelbase of the engines. Unless the track is perfect, and it never is, you will only get three of the four wheels in contact with the track.

One possibility would be to have a wagon "permanently" coupled to the engine, picking up power from metal wheels as well as the engine's driving wheels. This will give a longer flexible wheelbase. I don't know if you are doing a shunting layout, but if so it might be possible to kit bash a shunter's truck. If it's regular trains then it could be an ordinary wagon or carriage.

Incidentally there is a prototype for this - sometimes the small lightweight diesel shunters were permanently coupled to a wagon to make track circuit detection better.

The problem is that the frog must change polarity with the movement of the points. I don't have a set-track turnout, but almost certainly each point rail is directly wired to the matching rail beyond the frog. If you paint the frog with conductive paint connected to the points or rails beyond the frog then you will need to put insulated rail joiners on the two frog rails to avoid a short circuit.

Any rigid framed loco will only have three wheels fully in contact with the rails at any moment, that's a matter of physics. That usually works out as two wheels on one rail and one wheel on the other! Frequently the plastic frog is the highest point on a turnout so that the one wheel collecting current from that rail becomes isolated. My partial answer to this Murphy's law isolation is to take a large, fine, flat, sharpening stone and slide it back and forth over the rail tops until they all show an equal shine. This way the plastic frog becomes equal in height to the conductive rails and the loco gains a 50/50 chance of crossing the frog. :-[

Regards, Greg.P.