Deleting existing railroad tracks:
If you want to delete/destroy only certain parts of an existing railroad track, you sometimes end up having only the option to delete a very long segment of your track. To adjust the length of the segment you want to remove simply make use of the option to built switches and/or signals. Each switch/signal splits the track into smaller pieces at its location, so can use it to mark the beginning and the end of the section you want to remove.
At the moment, you cannot build any kind of street over existing railroad tracks. The only way to actually build a crossing is by building the street first (and if necessary delete existing tracks beforehand), and then lay the crossing tracks on top.