First time through, sing in a normal voice, then soft, then loud, etc. exaggerating motions to fit the tone.
Little red caboose, chug, chug, chug.
(Fists at shoulder level, alternate shoulders on the "chug, chug, chug")
Little red caboose, chug, chug, chug.
(Repeat "chug" motions)
Little red caboose behind the train, train, train, train.
(Point thumb back over your shoulder on the "train, train, train, train")
Smoke stack on his back, back, back, back.
(Repeat "chug" motions)
Comin' around the track, track, track, track.
(Repeat "chug" motions)
Little red caboose behind the train, CHOO, CHOO!
(Pull down motion, like pulling a whistle chain)