But did the rule expressly say "do not say make coffee or go to the loop while approaching crossing loops."?
No. It did not say what he must not do. It expressly stated what he must
Could the guard of the Southern Aurora actually see the signals through his periscope, or while leaning out of the window?
OK - I've dug out the Board of Enquiry Report, and here is what it says about your questions, plus the set-up of the running cross.
4.3 These instructions require the Fireman-
(ii) Have a responsibility in regard to signals and be always on the alert to act on his own responsibility.
(iii) Draw the driver's attention to anything he considers unsafe; also when approaching level; crossings, he must keep a sharp lookout and avoid all unnecessary duties that might distract his attention.
(iv) When the locomotive is in motion, he must operate the Locomotive Vigilance Control System . . . . Before pressing the button, the Fireman must satisfy himself that the Driver is alert.
(v) In the event of the Driver becoming incapacitated the Fireman is required to control the train in emergency, he must shut of power and apply the air brake . . . .
(vi) Keep a good look-out for signals . . . the Fireman must be disengaged when approaching or passing a station, signal box or junction so that he may keep a good look-out for signals.
8.2 Sighting of Signals from the Brake Van and Locomotive.
On 19th February 1969, the Board rode the Brake Van MHN 2364 on the "up" Southern Aurora. Weather conditions and visibility were similar to those on the day of the collision.
No difficulty was experienced in viewing the signals from the side viewing mirror, and the distances in advance of them at which the indications could be recognised are shown below for the signals at Violet Town Loop.
Automatic Signal ES. 5774 1 mile
'Up' Home Arrival Signal No 27/8 72 chains
'Up' Home Departure Signal No 27/4 42 chains
(My note: 1 mile = 80 chains.)
9. The decision of Mr Humphrey, Acting Senior Train Controller, and Mr McDonnell, Train Controller, at Spencer Street to cross the Southern Aurora and the goods train at Violet Town Loop was in accordance with good train running practice. If the Southern Aurora had obeyed the signal indications and slowed down, it would have resulted in an ideal running cross.
I think that will show you that rules were properly in place, and absolutely disregarded by both the Fireman and the Guard.