I don't really agree with the statement that "it is often said it was his favorite attraction in Disneyland." I, personally, have never heard nor read that. And the fact that he kept a set of striped overalls in his firehouse apartment so that he could run the trains of the Disneyland Railroad seems to suggest otherwise. But I digress.
As to your question about the Disneyland Railroad spiel, yes, the attraction was mentioned. This is from the December 1962 live narration script:
""Our train is rapidly approaching the newly explored Nature's Wonderland...an area of exciting true-life adventures in Beaver Valley, Bear Country, the great Living Desert and magnificent Rainbow Caverns."
And this is from the December 1973 recorded-spiel script:
"Walt Disney often said, 'Disneyland will never be completed as long as thee is imagination left in the world'...And here in Frontierland there are still wide open spaces left for imagination to conquer. (pause) Across the open meadow, you can see part of the colorful Living Desert and Old Unfaithful Geyser in Nature's Wonderland."
This 1973 date seems not to mesh with your statement that the re-routing of the DRR track in the 1960s made the Living Desert unviewable from the DRR. I don't believe the track has been re-routed all that far on the park's northern border.