The path forward on this hinges on Peyton's health. If he can still throw the ball reasonably well (say 30- 40 yards with good velocity and his usual, near precise accuracy), then that would be acceptable to me to call him "healthy" for the discussion to follow;
Assuming he is healthy, I believe he will be a great quarterback for 3-5 more years. At that point, he becomes more of a "sure thing" than any other option available. Therefore, point 1 = I keep him as my starting quarterback.
Next step, what to do with the first pick. I am certain Andrew Luck will be a good NFL quarterback. Will he be a "franchise" quarterback on a Superbowl contending team? That is not nearly as certain. Based on point 1, I already have that for at least another 3 years. So, does he then make a good, and patient back-up quarterback? That, I doubt. If he is on this team with an uncertain playing future during his entire first contract cycle, I suspect that will create issues that a new coach (yes, I think I would probably let Jim go) and new GM don't need to deal with. So, point 2 = I would not draft Andrew Luck.
What to do with the draft then: First, as a GM, the first 2 points would not be public knowledge because I want as much value for the first pick as I can get. I would trade down in the draft; target value for the pick: mid-first round, 3rd or 4th round this year, and 2nd or 3rd round next year.
Next, what do I view as the team's real needs to get back to a Superbowl in the next 3-4 years? The team needs to rebuild a 6-7 man rotation in the secondary around Melvin Bullit and Antoine Bethea. The colts NEED a shutdown corner and much better overall depth here. I am not sure who, if anyone, fits this bill as a first rounder, but that is where I would start looking.
Also, Pat Angerer and Gary Brackett are great linebackers to base the core on, but the colts need additional, high quality depth at this position as well. If I couldn't find a good shutdown corner as a first rounder, I think an additional 1st round linebacker would be a good choice, especially if I can not keep Gary under contract.
I think, if the OL and DL can be kept healthy, the talent is there, even if I loose Mathis to free agency, which is highly likely. So, I would not focus anytime before the 5th or 6th on either side of the line this year.
I would probably use the additional 3rd rounder this year to get a good quarterback to groom as a back-up with upside potential. That is the point in the draft that most often breeds the next "Tom Brady" or "Ben Rothlesberger" type franchise quarterbacks, not typically the first round (Peyton is a notable exception to that trend). Andrew may be another like Peyton, but, following my assumption above, you know what you have with Peyton, as do the rest of your core group of players on the team, which is a key point.
Finally, as GM, I would take a hard look at strength and conditioning technology and coaching. I believe the colts have an issue there that needs addressed. They are never "the most injured" team in the NFL during any given year. However, they are often towards the top each year and it seems to always hit harder than it should (depth being part of that issue - see our defensive struggles over the last 6-7 years as evidende of this issue playing out).
Now, if my initial assumption above proves false (Peyton looses too much of his strength and accuracy), the game changes completely. I would draft Andrew Luck with the first pick and go after a shutdown corner with the first pick of the 2nd round.