In principle a high-floor tram could have virtually the same interior as a train, and the either could provide a high frequency service. Many of the same cost savings could be realised by measures such as DOO while retaining heavy rail operation. Trains could even be fitted with improved braking to run on line of sight with minimal signalling.
The only cost that is intrinsically lower for a tram of the same size and passenger capacity is energy, as it will be lighter. However if 750V is used on a relatively long route this could be cancelled out by increased resistance losses, and it's probably a fairly small slice of the total operating cost.
So there are means of cutting railway operating costs significantly given a different approach, particularly if the Valley Lines can be made as far as possible operationally separate from the rest of the network.
However the capital cost for trams will be higher than for an equivalent number of trains. This is firstly because trams are more expensive per square metre of floorspace, generally being smaller and always having extra features needed for street running. Secondly it may be more difficult to conclude an attractive leasing deal, because there would be less chance of using the trams elsewhere at the end of the leasing term, particularly if they had non-standard features such as high floors which made it difficult to sell them on elsewhere. Thus somebody would probably have to buy the trams outright or sign a whole-life leasing deal. Tram-trains that can share tracks with residual freight trains would be more expensive still.
Thus, the whole-life cost of introducing and operating an enhanced service on the existing Valleys network would probably be a bit more for trams than for new trains. However the tram has the advantage of being able to generate more passengers by going off the network onto places where new tramway is feasible but new railway would be impossible. The obvious example is Cardiff Bay but there are other ideas as part of the Cardiff Metro project.
Examples such as the Tramlink Wimbledon line and Metrolink to Bury and Altrincham can be quoted to show how much light rail conversion increases passenger numbers. However in each of these, the service was extended to serve useful destinations that the train didn't serve before, the centres of Croydon and Manchester in these cases. So this is at least partly a feature of the extra journey opportunities trams provide, rather than the fact of trams rather than trains.
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Having signals will also allow superior capacity in degraded conditions (rain, etc)
This benefit would only apply in conditions of very poor visibility, which hardly every happen these days. If rain is heavy enough to slow down trams (which are very sure-footed and have sanders for poor adhesion) then it would probably affect trains in the same way.
In my view any such benefit is vastly outweighed by the disruption that happens to railways when the signalling fails. With simpler signalling and no track circuits, trams are much less likely to be affected by signalling problems.
