This is where the road subsidy becomes much more apparent. We use appropriation and tax dollars to expand the road network, but the railroads generally don't have access to either. So they're not expanding other than by running longer and longer trains.
As for connections, electric trucks would work great for that.
> We use appropriation and tax dollars to expand the road network, but the railroads generally don't have access to either.
The federal government leases tracks using Amtrack money (among other public agencies). They get low interest rate loans as well. Definitely nothing near Chinese level of subsidies.