why does a steel ocean liner flaot in water?

The average density of the ship is less because of the large volume of air contained in the hull. It floats the same way you could make a simple aluminum foil boat that floats. Or like a metal rowboat or canoe.

Anything will float on water if the density of that object is less than water. Density is defined as mass / volume. If you take a heavy material (steel) but stretch it out where it takes up a lot of volume, you can get that material to float.

If you took that steel ocean liner and crushed it into a ball, the mass is the same, but the volume goes way down. This means its density goes up, and it will sink.

It's the same reason that a helium balloon floats on air. The helium in the balloon is less dense than air and the air in a boat is less dense than water.

If the water the ship displaces weighs more than the ship, the ship floats.

The ship is mostly air, which lowers the density.