In an aqueous environment (you did not describe the environment), mild steel will become the anode in a galvanic couple and corrode preferentially. However, with stainless bolts, it sounds like you may have a small cathode surface area relative to a large anode surface area and this works in your favor. Your stainless bolts may also be electrically isolated from the steel by your rubber gasket, which also works in your favor. So the answer to your question is, "it depends".
The tailrace gate will be exposed to the weather 99 percent of the time, in a climate with a temp. ranging from approx. -25 to +25 celsius (with a considerable amount of salt spray). The other 1 percent the gate will be submerged in the north atlantic ocean.
Yes.
In a highly electrically conductive media you will get serious galvanic corrosion of the steel near the SS fasteners.
With these exposed to the air and spray you will probably also get serious corrosion of standard 18-8 (304) fasteners.
You are better off with very over sized steel hardware and living with long term general corrosion.
There is a lot of info from Europe on various flood control gates.
In the last 20 years most have been installed as 100% duplex SS, structure and fasteners.
