In? or On?

A few months ago, (honestly I can't remember if I blogged about this before or not, so if I have, forgive me) one of our Brazilian friends was asking me what the difference is between using "in" and "on" in the English language. He's fluent in English, but these two words always give him a hard time. Now of course I was patient with him and described the difference: in is used when you are physically inside something or feeling someting e.g. "in the house" or "in a bad mood". On is used when you are physically on top of something. e.g. "sitting on the chair". Since my descriptions might not have been technically correct, I pulled some info from a writing website. Here's their take:
In: in mainly denotes “rest at”:

PLACE: He lives in the country. He lives in Chicago. (BUT, He lives at 2300 Wabash Ave.)
TIME: I’ll be there in an hour.
MANNER: The child ran down the steps in tears.
REFERENCE: In my opinion we need a referendum. They are happy in their marriage.

On: on indicates proximity and position above or outside:

PLACE: He sat on the fence.
TIME: He was not thinking well on that occasion.
REFERENCE: He asked my opinion on the matter.
CONDITION: We’ll hire him on your recommendation.

At the time I thought, what a weird thing to have be a major hang-up with the English language. I know we have lots of intricacies, but I never considered that being a big one. Then again...yesterday I was on the train and a woman next to me answered her phone. Obviously the person on the other end asked her where she was and she answered that she was "in the train". Something clicked that struck me as odd. We would never say, in English, that we are "in the train". We'd say we are "on the train". But, we'd say we are "in the car". What's the difference? There isn't one. There is no way to logically explain why we say we are "on the train" versus "in the car". No wonder our friend was having problems with the distinction!