I've heard it both ways .... use the steel wool to sharpen, as you have mentioned.
And don't use it, for the rust-fear factor.
Really don't know your answer. So guess you have to make your own conscious decision!
Though ... you could do your own trial ... make one out of each and see what happens.
Have never used crushed walnuts shells ... interested to hear more as to the pros/cons there!
While we are on pin cushion stuffings ... my Mother always used sawdust!!!
Was that just a post-depression thing? Or was there a reason to use it?
Again, the pros/cons for this one if anyone knows.