Quote by John232
Shouldn't these be the same two things?

Yes, it obviously doesn't matter if you observe something with your eyes or with a video camera.
Quote by John232
If A and B are not on the train then wouldn't the distance from A to B seen from on the train shorten, since A to B could be "seen" as a single object in motion relative to the train?

You're right, but he wasn't talking about the distance in the train's frame between the points on the ground where A and B occur. That distance changes with speed as ##1/\gamma##, i.e. it gets shorter. He was talking about how the coordinate difference ##x_Ax_B## in the train's frame depends on the speed of the train. That difference changes with speed as ##\gamma##, i.e. it gets longer.