I was just playing with bluetooth right now (though on my teensy 3.0 and not an official Arduino). I have a HC-05 that I bought off of ebay, and I hook it up to one Teensy's 3.0 serial ports. Using the Connection Terminal app, I am able to connect to the device, and send/receive text. With your app, it never pairs with the HC-05, and it only sees my my wife/daughter's phones and not the HC-05.
At present, I haven't changed the name or passcode used for pairing (1234). Here is a link to the item from the seller: http://www.ebay.com/itm/HC-05-Bluetooth-Transceiver-Host-Slave-Master-Module-Wireless-Serial-6pin-/221158958927?pt=LH_DefaultDomain_0&hash=item337e19e74f.