Question: What city is this movie set in?
Answer: We are never told where the movie takes place.
Question: Why does this movie have so much product placement? And why did Jon put "Pepsi" and "Wendy" stickers on his train set?
Answer: Movies are incredibly expensive. Product placement helps pay for them - companies will give the studio money if the movies feature their products, which lessens the studio's financial burden. The stickers are likely just more product placement, but in the "reality" of the movie... Jon just probably thought they'd look cool or make the train look more realistic or something.
Answer: He's a cartoonist.