That depends - there's no requirement for stewards for less than 120 mids, nor for fewer than huge crews, so it's clearly NOT cooking time.
Which implies that it's more laundry and entertainment services. ...
I don't see your logic. I'm discussing a free trader treating high passengers - total crew of 4. When you start talking about huge crews, you're getting into ships large enough to invoke High Guard's rules about a service crew. If a ship is so big that it has its own kitchen staff, then certainly the steward would be free to do other things.
As for mid passengers, it is expressly stated in the rules that they receive no steward support, at least not in a ship small enough to slip beneath High Guard's crew rules. The mid passengers can pull microwaveable Stouffer pot pies out of the stateroom freezer, heat them in the microwave themselves, and eat them in their own disposable containers with plastic sporks and be glad of it. They pay Cr285 less per day, they can't expect to get the good meals.
Nothing in either of those cases implies that the steward is not cooking meals for high-passage passengers, and the meal is probably the most important daily social function across the various human cultures. While there are tricks that will ease the load while maintaining a minimal standard of taste and quality, it still comes down to the free trader's steward spending time before the meal preparing food for 8 people, delivering the food to his passengers in some manner, being available during the meal for any needs that come up, and cleaning up afterward. Even if you assume very high quality microwave products (shudder) in very advanced and sophisticated microwave machines, it will take time to prepare and present them in an acceptable manner.
Of course, some of this is a rather abstract debate. When we talk about free traders and similar small ships, they're like staying at a budget motel. Does that continental breakfast mean the waffle-maker with the batter standing by for me to make my own waffles, along with a selection of yogurts, hard boiled eggs, and so forth, as it is at the typical Best Western, or does it mean just coffee, toast, little packets of jelly and butter, and packages of vending-machine quality cheese danishes, as I found at another place? Are the breaded veal cutlets prepared and cooked by the steward, or did they come pre-cooked and frozen out of a box and get heated in the oven - or the microwave - while the steward is reading his dime novel? Does housekeeping mean fresh towels in your room every morning or is there a sign telling you they're available on request? It's more likely to depend on the attitudes of that captain and the skills of that steward than anything else.
Still, I can't see how having a lounge singer is better than having someone to prepare your meals. What service do you propose to offer that would both require a person and be worth an extra Cr2000 for the trip, if not to offer them a decent quality of meal?