You've got an SE FDHD, meaning you can put System 7 on a 1.4MB floppy. It won't fit on an 800K.

Get System 7.0.1 from Apple's website. Use the disk tools disk and place your copy of Pyro on there. You may need to remove the Apple HD SC Setup and Disk First Aid programs. Perhaps the modules of Pyro 4.1 are only compatible with System 7?

The disk you make can be transferred directly from your USB floppy to the SE since you'll be using high density disks.

I'm not sure how big Pyro 4.1 is so if you could give me a ballpark figure I would be able to estimate this better.