Modern (diesel, North American) freight locomotives have over 700 hp per powered axle (4400/6). They can manage with this-- can use their power to pull trains instead of having to reduce power to avoid slipping-- because (a) they have very sophisticated, microprocessor-based, wheelslip control systems that detect the beginning of a slip and correct for it, and (b) they have lots and lots of weight on the axles (CSX's "AH" locomotives weigh 436,000 pounds, so over 70,000 lbs per axle). The PA and FA didn't have either of these advantages: control electronics in the late 1940s weren't that sensitive, and these locomotives weighed between 50,000 and 60,000 pounds per axle.
So they just couldn't use very much power. The PA, designed for passenger-train speeds, had 500 hp per powered axle, but even that was too much at lower, freight-train, speeds: so the FA-1 had only 375 hp per powered axle. (Note that at the speed of a fast freight train on fairly level track, the PA's greater power could be used. But slower freight trains (think coal and ore), particularly going up hill, spend a lot of time running at much less than 20 mph, and freight locomotives were designed for this.
You are right that changing the gear ratio doesn't solve the wheel-slip problem. Wheel-slip depends on the power delivered (which determines how much force has to be exerted), the speed, and the weight on the axle. What the higher gear ratio does is increase the motor r.p.m. at a given wheel r.p.m. Put a lot of power-- so a lot of electric current-- through a motor and it heats up. For a given amount of power, this effect is worse at lower motor r.p.m. (Amps is what heats things up: the way traction motors work, at higher r.p.m. the voltage is higher, but the amperage is lower.) Running a passenger locomotive at full power at low speeds risks heat damage to the traction motors: PRR and UP re-geared their PA locomotives when they re-assigned them to freight so that the motors would "think" they were operating at passenger train speeds.
F.W.I.W. Fairbanks-Morse, in the mid 1940s, designed a locomotive very similar in specifications to the PA (A1A trucks, 2000 hp diesel engine): the "Erie-built," so-called because it was assembled by General Electric at the Erie, PA, plant. (The similarity to the PA is maybe no coincidence: Alco was in a partnership with GE in the locomotive business at the time, and the same GE engineers who worked on the F-M locomotive were involved in designing the PA.) They marketed it as a dual-service locomotive, suitable for both passenger and freight trains. But the ones sold for use on freight trains were ballastedto be heavier than the ones sold for passenger use.
