I think there might be mixing of two different things going on.
Hotels, as I understand, are a question of duty to care, and may be also applicable when rerouting at a later date.
Compensation is compensation. That is due if the cancellation is done within 2 weeks of the flight, and an alternative flight is not provided with time difference within the frame outlined (-2/+4hrs or -1/+2hrs depending on timeline).
With regards to the train ticket; I would expect that a train would constitute a rerouting at passengers leisure, at least if Ryanair agreed to such an arrangement.
However the passenger clearly chose to be refunded as far as Ryanair is concerned, that is the end of it.
Unless Ryanair chooses to be good...