What design feature lets a steel cruise ship have lower average density than water?

Answer: Enclosed hull volume

Enclosed hull volume ✓ — Right. A floating ship settles until the weight of displaced water equals the ship's own weight. The hull encloses enough volume that it can displace that water before submerging, making the whole ship's average density lower than water. This is why shape and enclosed air, not steel alone, decide the outcome.

Steel lighter in seawater — No. Steel does not become lighter just because it is in seawater. The material remains denser than water, which is why a solid steel block sinks. The ship floats because its hollow hull adds a huge amount of enclosed volume around the steel.

Engine upward thrust — No. Engines push the ship forward, not permanently upward like a helicopter. A dead ship with no engine thrust still floats if its hull is intact and loaded within its marks. Buoyancy is passive: the water pushes up because the hull has displaced water, not because machinery is holding it there.