Electrical – pMOSFET reverse Drain-Source current

The Vth of a NMOS is the Vgs at which it operate until (ie. so long as Vgs > Vth it will continue to conduct).

As you have stated this Vth is 1.0V. Initially when the switch is closed the NMOSes will turn on as the voltage at their respective sources will be zero and the voltage at the gates will be 2.5 - this is well above the Vth that you mentioned of 1.0V. As the capacitor charges through these NMOSes which are now more or less making short circuit the voltage at the source is increasing and it will continue to do this until it reaches 1.5V at which point the Vgs will start to go below 1.0V thus making the NMOS transistors turn off.

The fact that there are two of them doesn't really make any difference, there could be 1 or 10 and it would have the same result.

The mistake you made by thinking it will only charge to 0.5V is that the voltage drop is not from the drain - source so there would not be two drops, it si only to do with the potential between the gate and source and as explained once this goes below 1.0V the transistor turns off.

You have an N channel MOSFET connected as a source follower. A source follower (just like an emitter follower for BJTs) can't have as it's output a voltage any higher than what is put on the gate. In fact, for a MOSFET, the source voltage will be a couple of volts less than what is on the gate - this is why you see 3V. The act of connecting your load to the source ensures that you cannot achieve full-turn-on unless the gate rises higher than 17 or 18 volts from ground. But all is not lost....

Ask yourself - what turns the FET on - answer - the gate to source voltage has to be a couple of volts or even higher on some fets. This can only mean that the fet is partially turned on.

You ought to consider grounding the source and putting the train lights in the drain. Like this: -

Rd is where you'd connect the lights. Now with the mosfet gate at 5V with respect to grounded source the fet turns on much better.

Another way is to use a P ch MOSFET driven from a BJT: -

Because the P channel FET's source is up to the positive supply, pulling the gate down to GND ensures it turns on to the lowest resistance. Don't run this circuit any higher than about 15 volts though because the maximum FET gate voltage might be limited to 15 volts - read the data sheets - a lot of mosfets are OK for +/-20 volts gate-source but some are only rated at max 12 volts.