Wh y steel is used to …

Because they can be made comparatively cheaply that way. Steel has strength and a certain elasticity, and can be easily formed in a rolling mill. To my mind, compressibilty comes in more with the ballast than with the rail.The ballast (usually stone chippings, but in early days - notably on the Cheshire Lines Committee railway and Cheshire Lines Extension Railway, the engine ash and clinker was recycled to give an exceptionally smooth ride) provides a springiness and compensates for possibly ground movement due to water levels, compacting of soil, compression and expansion of peat and other absorbent soils due to water, and so on. (Underground railways seem to manage without ballast and the rails are mounted on concrete so far as I can see in our locality.) Compressibilty can come in with the steel itself as the weight of the train passes over it, but the resilience of the steel will resist tendencies to permanently deform. Steel has a high coefficient of restitution - a steel ball will bounce nearly as well as a rubber one. I'm no expert on this - but you might find something here to work on