since the LED on the Bluetooth module is changing then the problem will be with the connection between the BT module and the Arduino.
There are 2 parts to the connection when using Bluetooth. 1. The Android device connecting to the Bluetooth module, and, 2. the app connecting to the dropController/Arduino.
1. The Android device connects to the Bluetooth module. The LED on the BT module changes.
2. The app sends a HELLO message to the drop controller and waits for a reply.
3. The dropController gets the HELLO message and turns on the waiting LED (the yellow one)
4. The dropController sends back the HELLO message.
5. The app gets the reply and changes the BT button and the screen title to connected.
If the waiting LED on the dropController is not turning on then the dropController is not getting the HELLO message.
If the LED is coming on but the BT button is the app is not changing then the app is not getting the reply.
I suspect you have the BT module connected wrong or at the wrong baud rate. The dropController uses 9600.
Check all the connections, check the resistor values and make sure they are the right way around.
If you are still having problems have a look at the Bluetooth guides I have on the other website – http://www.martyncurrey.com, especially http://www.martyncurrey.com/arduino-with-hc-05-bluetooth-module-in-slave-mode/ and http://www.martyncurrey.com/arduino-and-hc-06-zs-040/