If you download the magazine article in Mr. Dorman's post above, there is a reproduction of a drawing from the August 1899 Railroad Car Journal showing just such a spray painting apparatus being used on the Santa Fe, and in Terry Metcalfe's excellent UP freight car book, there is a picture of a worker using a very similar long necked spray gun to paint a UP steel boxcar in the late 1930s. The chief advantage to the long reach is that the worker can paint the car in its entirety while standing on the ground, without needing to erect scaffolding to allow brushpainting. As labor costs steadily increased, railroads looked for ways to improve efficiencies anywhere they could.
Given that Mr. Delano was a documentary photographer, I trust the caption given with the photo, that states the worker is painting the car. I was taken aback when I first saw that photo too, as I wouldn't think that cars would be painted outdoors in February in Chicago. But, it was 1943, and there was a war on. It doesn't look to me like he's sandblasting the car: there's no lettering on it anywhere, and that paint is nice and shiny.
Just my two cents.