That’s definitely part of it. Also not an expert, but I believe you have the gist of it. Diesel engines are more efficient for a couple of reasons, not the least of which is more efficient heat capture to use for Work.

Another factor would be that if you want to do an oil combustion into steam power, you have a few issues:

1. You now have to lug around a LOT of both fuel and water, instead of just water and dry coal. Water and oil are both heavy by comparison to coal when lugging a train car of it around.
2. you now have two areas for heat loss to happen. Steam engines require massive boilers, high heat, and run much greater worst case failure risks (I.e. explosions) which are at highest risk when the water runs out. Coal is worse for this than I imagine oil would be, though inertia is a powerful force. Why move to another complicated system that does the same thing when you can use the old one?
3. Supply lines and training: if coal is already managed logistically, why switch to something else that provides a marginal benefit when coal is both cheap, easily accessed, and your engineers already know how to use it?

I’m sure there are even better reasons out there, but that’s what comes off the top of my head.

In this context, yes, because of the cancellation on the fractions when you recover.

1/3 x 3 = 1

I would say without the context, there is an infinitesimal difference. The approximation solution above essentially ignores the problem which is more of a functional flaw in base 10 than a real number theory issue