The simple question first:
There's two ways to do automatic replacing of vehicles: By upgrading, or by same-model auto-renew.
Here's wiki links describing how to set them up:
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Upgrading with Replace vehicles
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Auto-renew
The other thing I see loading up your save is that you're both using too many signals, and too few. Most of those you use are of the wrong type. This gives you stuck and misdirected trains, that waste time going other places than their destination.
For example this stuck train:

When I follow the tracks, the one it came from and the one it's trying to go into, I find this junction:

The arrows show the direction the train entered and wants to leave. There are no other signals on these tracks. Because you used block signals, the "dispatcher" sees that the two tracks merge into a single junction, and the same train (doesn't matter that it's the same) already occupies that block. So the signal shows red. Solution in this case: Add more signals to the two lines.
Going to another station nearby, you have this:

There are five two-way block signals on the way in to a dead end track, which is already occupied. But you can see that signal (1) is showing green, despite that entering this track would be pointless, since you'd just end up blocked by the train already in the station. If a train enters at green signal (1), it will also pass signals (2), (3), (4) as green, but then stop at signal (5) which is red. The entering train can't proceed, but eventually the train in station will try to leave, when it reaches signal (5) the entering train sees someone else wants to pass in the opposite direction, and reverses. All this would be avoided if you remove signals 2 to 5, leaving just signal 1. Then signal 1 will show red when a train is in station, and the track is occupied. Signal 1 is the correct one to keep, because it's closest to the switch but still on the dead end track.
Here is another problematic station:

The entire track area I've marked with red lines is one single signal block. This means that the one train loading in the station is preventing any other trains from running on any of those tracks. Other trains can't use the other track in the station because it's logically blocked, and they can't enter/leave the station to the left either because the switch is blocked. If you place signals at both (1) and (2) then you separate the switch from the two station tracks, and it becomes able to work properly.
Things you should do:
1. Decide that you want some of your tracks to be single-direction tracks. When your tracks are single-direction you don't get trains entering from both directions at once, meet in the middle, and then one has to turn around. That wastes time, and trains wasting time also waste money.
2. Use one-way signals instead of two-way signals. You build one-way signals by clicking multiple times on the same signal, with the signal build tool. One way block signals prevent trains from going the wrong way down a track.
3. Try to use path signals instead of block signals. Path signals are different from block signals, some people think they are harder to understand (I think they're easier), and they are generally closer to how railway signals work in the real world.
Path signals are easy to place. You just need to answer one question, "If I place a signal here, and a train stops at that signal, would the train block a different track?"
There are two kinds of path signals, normal and one-way. Both only give signal in a single direction, but the normal one allows trains to pass from the other direction.
Here's an example where I changed an area to use path signals instead of block signals:

I decided a direction for each track. Then I removed all the existing signals, and instead built a few one-way path signals along each track, making sure they point in the direction I want the track to have. Pay attention to how I leave the entire junction area free of signals. Path signals are smart and allow many trains to pass through the same junction at once, as long as their paths that don't cross. If a train wants to cross a path another train is already going through the junction, that train gets a red signal until the other train has passed.
The two tracks leading to the station on the upper right get normal path signals instead of one-way. That's because trains need to be able to enter the dead end tracks, but also leave them. The path signals protect the exit from the dead end tracks, but the entry into the dead end tracks is actually protected by the signals before the junction.
I hope this helps and is not too confusing, it's a lot of words at once
