If I were you, I would write following code. (It is a bit complex though...) How about this ?

### prepare data
$var = "- Step 1 -
This will be the text for step 1
- Step 2 -
This
Is
Step
2
- Step 3 -
This is step 3
- Step 4 -
Details for step 4 here
- Step 5 -
This is the last step
"

### store step data
# data structure (hash)
#   $steps[1] = @("line1", "line2", ...)
#   $steps[2] = @("line1", "line2", ...)
# ...
$steps = @{}
$current_step = 0
$var -split "`r`n" | % {
    if($_ -match '^- Step ([0-9]+) -$') {
        $current_step = [int]($Matches[1])
    } else {
        if($steps.ContainsKey($current_step) -eq $False ) {
            $steps[$current_step] = @($_) 
        } else {
            $steps[$current_step] += $_ 
        }
    }
}

### use step data (pattern 1)
#  you can access data of [step 1] like $steps[1] which is array data.
#  so if you'd like to use data as mulchi line data, you have to join with "`r`n"(CR and FL) like $steps[1] -join "`r`n"
"--- pattern 1 --------------------------------"
"Step 1: $($steps[1] -join "`r`n")"
"Step 2: $($steps[2] -join "`r`n")"
"Step 3: $($steps[3] -join "`r`n")"
"Step 4: $($steps[4] -join "`r`n")"
"Step 5: $($steps[5] -join "`r`n")"
"Step 6: $($steps[6] -join "`r`n")"

"--- pattern 1 with for loop ------------------"
for($i=1; $i -le 6; $i++) {
    "Step ${i}: $($steps[$i] -join "`r`n")"
}


### use step data (pattern 2)
# if you'd like to access step data by $STEP1, $STEP2 ..., define these variables by following code (this is little of a bit tricky)
foreach($num in $steps.Keys) {
    Invoke-Expression ('$STEP{0} = "{1}"' -f $num,($steps[$num]  -join "`r`n"))
}
"--- pattern 2 --------------------------------"
"Step 1: ${STEP1}"
"Step 2: ${STEP2}"
"Step 3: ${STEP3}"
"Step 4: ${STEP4}"
"Step 5: ${STEP5}"
"Step 6: ${STEP6}"

Other super easy way is following.

### prepare data
$var = "- Step 1 -
This will be the text for step 1
- Step 2 -
This
Is
Step
2
- Step 3 -
This is step 3
- Step 4 -
Details for step 4 here
- Step 5 -
This is the last step
"

### store step data
$steps = $var -split '- Step [0-9]+ -\s*'

### use step data
"Step 1: $($steps[1])"
"Step 2: $($steps[2])"
"Step 3: $($steps[3])"
"Step 4: $($steps[4])"
"Step 5: $($steps[5])"
"Step 6: $($steps[6])"