To start with, I'm just digging a basic 1x2 tunnel, so we can expand and decorate later. I've got my station more or less done, except for decoration and such, and I have the starting tunnel to Overwatch mostly done. Once everyone is connected by basic tunnels, we'll start expanding. A 3x3 tunnel sounds best, possibly with the walls done in stone brick, or glass where there's a particularly impressive lava cave. I've looted a few mineshafts for tracks, and I have enough iron for a lot more, but I think a single track between towns would be best until everyone is connected. Once we've got single lines done, then we can double-up to make to-and-from rails.
EDIT: The initial tunnel to Overwatch is done. The tunnel ends just outside their town, with a small cobblestone marker outside the west gate to show the way down. Cities to the south of Bloodtopia should be easy to connect to now, as the tunnel I made went south for a long way before heading east. We can make a small station to change tracks where the tunnel turns. Anyone who wants to explore the tunnels, my station is not behind any doors, so head on over. It's outside my walls too, so anyone can go in. Eventually, I'm going to set it up so that only allies can go in, but that's too much work for now.
Additional Edit: Anyone looking to help on the subway, bring weapons. For_Pony decided to camp where it meets a cave and kill people.