Yeah, that sounds about right. I didn't realise I had to actually redeem the Steam key to be honest, assumed it just kind of... merged with the account you logged in with.
I mean, I guess if I did redeem the Steam key it would make a new service account and not include my characters and Veteran rewards etc.
Correct, redeeming the Steam key would be a whole new service account, even if it's on the same FFXIV username. I would recommend giving this key to one of your buddies or something as you basically have a spare copy of the game.
Although, just so we're clear, please log into the MogStation and confirm that you don't have the option to pay with Steam Wallet. Just to be sure before you buy anything else.
That must be it. My screw up for sure, I just assumed stuff that I shouldn't I guess.
And this is precisely the reason why I ask to you confirm on the MogStation, so we're not making any assumptions.