If the copyright on "Steamboat Willie" expired, anyone could copy the work or create derivative works from it featuring a similar character, but they could not call the character in derivative works Mickey Mouse, nor use Mickey Mouse's image in such works.
No, when the Steamboat Willy copyright expires, there is no longer a copyright which prohibits people from making or distributing additional copies of the work, from publicly performing or displaying the work, or from preparing new derivative works based on it (such as a new Mickey Mouse short in which he commands a homemade submarine powered by barnyard animals or something). Of course, attributes of the Mickey Mouse character which originated in later, still copyrighted material would not be available; thus you're using the original 1928 black and white Mickey, or forking a new version of the character off from there. Can't give him a dog named Pluto, nor even the distinctive Mickey Mouse voice, as those both appeared in later films.
They would, however, be able to still freely copy the original work even though it featured said character that is still under trademark because the copy of the work is not considered a new work, it is considered a *COPY*
I don't know why that would matter from a trademark perspective. Trademark is concerned with goods bearing a mark all originating from the same source, so as to protect consumer expectations regarding consistent levels of quality. Even the goods of two different sellers are indistinguishable, that alone doesn't mean that one is free to use the trademark of the other.
The trademark issue here is whether the MICKEY MOUSE trademark even survives, at least with regard to goods such as motion pictures. This is because the MICKEY MOUSE trademark is inescapably connected to the Mickey Mouse character, and now the character is free for all to use, meaning that his presence in a work no longer indicates that it comes from a single source. That -- the freedom to use the character, and the loss of the single source expectation of consumers -- is what kills the trademark. And we know that the copyright lapsing will control what happens to the trademark based on precedents like Dastar (where the Supreme Court said that trademark is not allowed to operate like a perpetual form of copyright), and SHREDDED WHEAT (where the Supreme Court said that where a patent expires, anyone is free to use the invention and to use the previously trademarked, descriptive name of the invention).
the work uses the trademark with permission
First, there would largely no longer be a trademark. Second, that would be clear naked licensing, which would likely invalidate the mark anyway.