First off get a magmar at the burned tower and get him higher to help with this gym. Then try to get a geodude and level him up or, teach dig or mud slap to quilava to handle the magnemites. For steelix try fighting type pokemon as he has a double weakness to them. You can trade drowzee for machop on 5F of the department store. As for where to train, try the route just ahead of olivine city or if your fire pokemon know an attack that handles water pokemon like thunderpunch or headbutt then train in the water towards cianwood city. I hope this helps!
At level 31 he'll learn Flame Wheel, which should be enough, since I really doubt Ember is going to cut it. Steelix also has a x2 weakness to Water so if Krabby knows Surf you can use that to soften Steelix up a bit. It probably won't kill him seeing as Krabby's Special Attack is lacking, but it will help. Fighting and Ground moves also help, Ground especially for those Magnemites.
Bargain shop, hurdle hop, pistol pop. No diggy, no doubt.