First of all,
Welcome to the Forum !
It is always good to have additional American Flyer enthusiasts on board.
There are more expert members on this forum than me when it comes to troubleshooting American Flyer equipment, but I will take the first shot at this since I have had similar problems in the past when I first took my old American Flyer out of storage after 40 years.
Mine is a 1946 #312, so there may be some differences. However, from the problem that you indicated, the problem is most likely in the reversing unit which is found in the tender (coal car) behind the engine.
There are sets of copper "fingers" that make contact with a copper drum to cycle the engine through the forward/pause/reverse/pause sequence. At the end of each copper finger is a spoon shaped end that touches the drum. Over time and use, the spoon develops a small hole from friction and wear and tear. When the hole gets big enough, the finger is no longer effective and must be repaired or replaced. In my experience, replacement with a new set of fingers is the solution.
In your case, if everything else works fine, but the engine does not run forward, those fingers on the reversing unit are the first and foremost culprit. Back last winter, when I first started to rehab my engine, that was my first problem to solve. I bought replacement fingers from a great vendor called Portlines who caters to American Flyer guys, and replaced the fingers myself.