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I just finished running this AP a few weeks ago, and we certainly added a few steampunk-ish touches throughout. Re your adjustments,
1. 25 point buy is too high even for a low magic approach. I wouldn't suggest going any higher than 20.
2. Commonplace guns - if you're sticking to muzzle loaders should be just fine (thats what we did). Once you get into revolvers things can get out of hand pretty quick.
Re low/limited magic, it all really depends on your approach. As your using the slow XP progression the campaign could well end before any high level hijinks begin, that would be the simplest. As for explaining it, the campaign doesn't need to be set in Golarian just Ustalav. Hell Ustalav could be in Ravenloft if you wanted.