Can I use a more robust transformer in this Soundtraxx circuit?

The transformer in the circuit is being used to match the output impedence of the decoder (8 Ohms) to the input impedence of the amplifier (high).  It isn't creating power, it is just transferring it.

Without knowing more about the transformers, and remembering a bunch of stuff I learned too long ago, my first guess is that the circuit wouldn't work.  I'd need to know about both sides of the transformer to try to figure out what would happen to the decoder.

The Wattage rating of the various transformers is going to make no difference at all.  The decoder puts out very limited power and the transformer is doing nothing more than impedance matching.  If the decoder's power output is rated at 1 Watt, that's all you're going to get from it even with a 5 Watt transformer.  Trying to use anything different than recommended by SoundTraxx is not going to improve the performance, and you run the risk of damaging the decoder.

Others have already responded about the transformer really needing to be an impedance matching device.  The 70V transformer you have is a special transformer designed for constant voltage audio distributiuon systems.  These are often found in large department stores, warehouses and any other place where a small audio signal (i.e. a couple of watts) needs to be transferred over long distances.  Under normal circumstances the resistance of a long piece of copper wire driving an 8 ohm load would be large enough to cause quite a drop in audio signal.  Additionally in these types of environments there are many speakers located throughout the building.  Simply wiring them in series and parallel would be problematic and along with the wire lengths above, it would become unworkable.  This is where the constant voltage system comes in.  Here's a useful link with more information on these types of systems.

http://www.ticcorp.com/25v_70v_100v_systems.htm

So for your transformer, it really isn't designed for the type of application you are wanting and the power rating on the transformer you are needing really won't matter.

 

Also if you read down the link/page it says 5 Watt = 1K Ohm. So you are changing a dime for 10 pennies.

I am not fully following the dime for pennies comment.  The chart which shows wattage vs. reflective impedance indicates the reflected load onto the 70V system of pulling a certain amount of power off for a particular speaker load.  A higher power load will reflect a lower impedance than a lower power load.  This is typical whether we are talking about constant voltage systems such as this or the transformer outside of your house which delivers lower voltage to your home than what is on the transmission line.

 

The chart shows the 5 watt output is 1000 Ohm. As his on hand output transformer he speak of is 5W max I assume it would  be close to the same Ohm value as what he has via his Radio Shack output transformer.  Hence my dime for 10 pennies allusion. But I'm oprobably all wrong in my thinking. 

You mean like the one shown below?  I put it next to one of the Radio Shack ones for comparison purposes.   It is from the PFM sound system and was designed specifically to duplicate the sound from the small on-board locomotive speakers into a real audio system.  I don't know if they make them anymore.  I believe the part number of the transformer itself was PFM-4 and they came in the "Stationary Speaker Filter Set" part number PFM-07.