All Caricature, No 'Real' Fields?
It seems that Steiger's performance (possibly at Hiller's direction) is simply the W.C. Fields on-screen persona. Perhaps Fields' was simply being himself on camera, but I suspect that he ramped it up a bit when the cameras were rolling; I suspect that the 'Performer Fields' was playing a very well rehearsed and crafted W.C. Fields "character" on screen. It is why he is considered a comic genius.
In that light, I would have preferred to see Steiger portraying Bill Fields, the man, in the "real life" scenes. Then, when working on a film or on stage, show how Fields the actor, the artist, worked at the character of W.C. Fields. And if that's not the way it really was, so what? Bio-pics are notoriously inaccurate, and it would have made a better, more nuanced bio-pic.
I love W.C. Fields.