One of my favorites MB Oktoberfest, brewed with US-05. Keep the temperatures around 65-68 deg F if you can, and give it the full three weeks. I tend to go lower on the carb sugar, but that is a personal preference.
only octoberfest i have done, was a true lager. used white labs german lager yeast and did the lagering steps fermenting low and raising to diacetyl rest....etc. you could easily use the ale yeasts you have on hand and it would taste just fine.
One of the most confusing aspects for new brewers. MrBeer products are brewed using an ale yeast. This is because the ale yeast does not require the strict temperature control that a lager yeast requires. The HME with the ale yeast will taste similar to an identical brew with a lager yeast. The intention is for you to brew beer with a taste within the style range of the labeled HME. If you're a stickler on semantics call it Oktoberfest Ale if you like. I have brewed it both ways and none could tell which was which.
I agree it will be very toffee malty. If you like that it is OK. The US-05 will give cleanest driest beer and go down to mid 50's for fermentation. Otherwise use the standard recipe/yeast and see what you think. Then you will know which direction you will want to go. You can run the Mr B yeast at 65 if you want but not much lower. I ferment most thigns at 65 these days unless lagers or saisons.
Regardless of using MRB, -04, or -05, you're still brewing an ale that is in the style of a lager.
There's nothing wrong with brewing it this way. Thousands of batches of Oktoberfest have been made and enjoyed this way over the years.
For my tastes, adding the DME in addition to the LME would result in a final product that was too malty. I'd do a hop boil to help balance it out.
As a newer brewer, this provides a good opportunity to see what different yeasts do. You could brew it as per the recipe now, then do it again later as a true lager just to see, smell, and taste the differences.