Si-the RR had what was called a "bow tie" loop about half way up Mt. Tamalpais. I believe it was where the branch took off to Muir Woods. I would have loved to have ridden a gravity car down, waiver or not!
I've spent a bit of time on Mt. Tam and in Muir Woods and they are a glorious combination. I can only image the ride down.
One aspect worth consideration to do it proper justice is the vertical relief. Forget the vertical needed for Mt. Tam itself. The tallest tree in Muir Woods is 258 feet, or 5 feet 4.5 inches in O scale, almost 36 inches in HO, and a more manageable 19.35 in N scale. Yes, that would be an impressive display.
Yes, the MT&MWRR could be modeled in N scale very nicely. With curves of 75 feet and Shays, it's a natural. Atlas' little N scale Shays would be perfect and I'll bet somewhere on the "net", one can find reasonable N scale 3D printing "tourist cars". While I love my chosen scale, N would work for an impressive layout. Now, just figure out how to make the gravity cars.