RETB is now obsolete, and has been replaced by ETCS on the Cambrian. ETCS would be prohibitively expensive and would require dedicated stock fitted with ETCS as on the Cambrian.
As far as I am aware, there are two staff to operate the line, other than the train-crew and those needed anyway at Llandudno Jcn: a crossing keeper at TalyCafn and the signalman at Llanrwst.
I would have thought that the crossing at TalyCafn could be automated, or controlled from Llandudno Jcn signalbox, without too much difficulty, and am surprised it hasn't been done already. This is one of my reasons for thinking no-one dares to ask for investment, as doing so may result in unwanted attention being shone on the line's economics.
The simplest solution for Llanrwst would be to just close the box and make the whole line one single token section, as suggested by Bletchleyite. The passing loop can no longer be used for routine passing of trains anyway, due to the interlocking being life-expired. As far as I am aware, the only time there are ever two trains between Ll Jcn and Blaenau nowadays is when an excursion uses the line. Maintaining a passing loop where you can't actually pass trains, and keeping a signalbox open year round just for half a dozen or so excursion trains a year seems madness to me. I find it surprising that such a situation is allowed to continue, but again I think it is a case of best not prod the wasps' nest.
As far as I'm aware, ETCS hasn't been installed on the other former RETB routes, so whatever they're using is fine.
We need the loop to run a usable service.