nytraveler

On the trains you can bring whatever baggage you want. You just have to deal with it yourself. There is no checked bag but carry-on is as much as you can haul with you. Large bags have to stay at the end of the car. Small bags go in overhead bin.

At Penn Station in NY and I believe also at Union Station in DC there are Red Caps who will wheel your luggage down to the train early - so you have the best chance of good seats - for a tip. Figure a couple of $ per bag.

Be aware that trains come in with passengers already on them and seats are not assigned (except in first class - which is very expensive) so it's very unlikely that you will get to sit together. But if you get on the train early you are likely to sit in the same car.

As for hotels, fire laws limit 4 people per room - so for 5 you will either have to get 2 rooms or a suite. You haven;t provided a budget. For basic (but goes fast) look at Radio City Apts in NYC. For a little more moderate suites look at the Beacon and the Affinia group of all suite hotels.