I think they were just two young boys playing on the railroad tracks, but they serve as a recurring image of the small town childhood friendship between Nicky and Hopper (Sean Penn). It's something they would have done as kids. Except as teenagers they race the trains, which is of course a lot more dangerous. The young boy holding the flower was supposed to give it to Caddie (Elizabeth McGovern) from Hopper. It's another recurring image because as a kid Hopper used to take flowers to his mother's grave.
Just watched it for the first time on cable. Very good movie! The story, the setting, the time period and the acting all came together perfectly. I'm glad I finally got to see it.
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