The problem you now describe is indicative of the lower plastic bearing plate floating in the stamped aluminum motor side frames as the factory staking has worked loose over the years. This will cause the armature to hop violently and the brushes to jump around in their holders. You can test for this by carefully pinching the aluminum side frames with finger/thumb while the motor is running / trying to run.
The old Lionel fix for this was to "dent" the side frames with a punch, some shops used cardstock jammed in to firm up the plate.
I have had good luck using tiny black anodized self-tapping screws into drilled pilot holes to hold the bearing in place.
For a non-destructive fix, use CRC QD or any non-residue contact cleaner, clean ALL oil & residue from between the sideframes & the bearing plate, using the nozzle to spray into the crevice. Dry it out well, several hours or overnight with a light airflow.
Now use the regular "thin"(not gel) CA adhesive("Super Glue", Eastman 910, etc.) and flow the cement into the crevice on both sides, letting it creep in by capillary action to fill the gap.
In about 10 minutes, the loco is ready to be lubed(grease on gears, oil on pivots & bearings/axles - don't forget to grease the lower armature bushing below the worm) and will run like new.