Basically, it all depends which kind of loco you're driving.
The loco like the DB E10 shown above is fed by alternate current. A transformer with several notches on the secondary coil is used to input variable voltage to the motors. The loco can remain on any notch that the driver wants for any length of time. Thus such a wheel allowing manual selection of notches makes sense.
On locos using direct current, things are less simple. You cannot use a transformer. So instead a variable resistance is used. This resistance produces a lot of heat, which is energy lost in the atmosphere, and could cause damage if used for too long. Such locos therefore use an automatic mechanism that passes through the notches in a controlled fashion, leaving the driver to use only a few stable positions : different couplings of the motors and always with the rheostat fully eliminated. It was not always like that, though. On early DC locs, the driver had manual control of the rheostat notches and had to monitor the Am-meters to know when he could switch from one notch to the next. It required some skill...
Modern locos using three phase motors and inverters are of course yet a totally different affair. Speed is fixed not anymore by applied voltage but by frequency. On such locs the driver can have a total and continous control of the frequency applied to the motors, the notion of notch totally disappears, and the control us usually done by a simple joystick.
This was my minute of very simplified electrical traction engineering.