I was a bit too quick to condemn there Paul as I'm a confirmed Loctite user on the right application so yes, on a twin crank web shaft such as this once the cranks are set in place the flywheel (unless it's two halves) isn't going very far but, tongue in cheek aside, I still wouldn't advocate it
And of course, the grub screw is heretic but it does have it's place and it does offer a much easier method of disassembly/movement if required.
I've studied a fair number of stationary engines over the years not to mention images but cannot recall ever seeing a sunken gib headed key on a flywheel – unless the slot is open ended.
Whatever, Doc G has more than enough to make a decision on but here are a few images that may help, not only on flywheels but other areas too
You can only just see the staked keys on this gorgeous McNaught Corliss valved engine in the Science & Industry (not Technology as previously said) museum in Manchester

This is the flywheel on the Galloways piston drop valve cross compound engine at the same place

A main bearing on another cross compound in the Kew Bridge museum. Built by Simpson it has an identical twin which was situated in the Strumpshaw St. Eng. Museum in Norfolk. Note the centre in the shaft, no key in the crank web and thin nuts on top plus other details.

And another main out rig bearing, more in keeping with Doc's intentions on the Hick and Hargreaves Corliss valved engine in Forncett. Note the typical variation in nuts on a renovated museum exhibit

With regard to the actual machining a slot or keyway. Like most matters there's a huge variation on the manner in which to achieve either. Regrettably however, most are not conducive with doing it on an ML7 with limited kit – to my mind that is the major factor to be taken into consideration before offering advice that the recipient would find difficult if not extremely unlikely to be able to put into practice.
Best for now – Ramon