Technically speaking it’s the key that is stuck. The key is the square profile block of steel that is in the keyway. The keyway, the groove, is indeed stuck. It’s not going anywhere!
Let’s nerd-out on the topic shall we?
A Key is used on a shaft keyway to retain mechanical power transmission components such as gear drives and pulleys to transmit power
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If you remove the hub that is on the end of the axle, you can attack the key head-on and drive that narrow flat head screwdriver under it and pry it up.
Grandpa’s pincers are a great idea too, and will allow you to grab the key as if the pincers were extensions of your own fingers, and pull it straight up and out. Diagonal side cutters will also work but this is no job for needle nose pliers. Leverage and a rocking motion is your friend here…