Yes, even in N scale I extensively use SMD resistors. I often etch custom PC boards to hold them, but leads can be added to them too. IN your install I would probably use enameled magnet wire (like you already use) instead of standard insulated wires as the wire is much thinner.
Here is a SMD resistor with added wire leads (and heat shrink to protect it). Heat shrink is rather bulky. Instead you could probably coat the resistor with some liquid electrical tape sold in the electrical department of any hardware store.
And SMD resistors on a custom made PC board.
The SMD component designations actually indicate their footprint.
For example a footprint of a 0805 (Imperial code) component (LED, resistor, capacitor) is 0.080" x 0.050". This applies to other sizes too. So if a component is 0603, split that into halves (06 and 03) and those are the dimenstions in hundreds or inch. 0603 component footprint is 0.060" x 0.030".
The resistor size is also related to its power dissipation rating. In your case using 0805 or even 0603 size resistors would work.
