Hi New to Love & welcome.
I don't think that I'd discuss this with friends ~ you just don't know what the reaction might be.
If this Steve is as nice as he sounds, and you get on with him & trust him, then I think I'd suggest telling him.
He then has the choice of you or Shelly. Since he's liked Shelly for a long time, he may well choose her, but you just can't be sure. If you have become closer friends lately, you never know, he might just choose you. If he doesn't know how you feel, he may not know that you are even in the running.
Yes, I'd talk to him about it, quietly & without fuss, but be prepared for him to say that he just wants to be friends.
Good luck!
