"Rails defunct" speak to me of truncated roads, of expired dates for the undertakings, for progress. The path of dreams has stopped. The known way has worn away from so much use and abuse:

sharp worlds have mingled,
made offspring of deciduous decades
that grow hale and feeble-striped
by the spoke of wayward stars.

The old routes to promising future destinations have been abandoned. The rails denounce wear and tear: uncertain future.
The voice comes out of the reverie and declares that the view of the place that once promised dreams now causes him melancholy and his spirit unites with the worn environment causing conflicting feelings between pride of belonging and memories of the past or childhood in contrast to the current abandonment and the status quo.
The images are spectacular and reinforce the history of the poem.