I made the jump, decided to retire right after the 20 year mark, rather than face the 179 day non flying gig, OR the 365 non flying gig. It's a tough decision, but remember you've got a retirement check behind you, that's key!
I can't stress networking enough. Nearly everyone that applies at an airline is current and qualified, with enough hours and training to be hired. So what sets you apart from all the other guys out there with their applications already in? You gotta network, go to job fairs, look up old buddies online, LinkedIn, Facebook.
If you don't have your ATP yet, my recommendation is call up Higher Power and use your GI Bill (if available) to get the ATP/737 type rating. Learning the way of civilian training will help when you get hired. Don't worry about the supposed bias against guys with no time 737 types, it's explained by using your GI Bill to get an ATP. It didn't stop me, and was just an easily answerable question during my interviews.
Get some interview prep! I can't stress that enough! ECC is who I used, best money I spent in search of a job.
Get your ducks in a row if you plan on relocating after you retire. I didn't, now my wife is prepping the house to sell while I'm down in training.
You've got two huge advantages that a lot of guys don't and that's your retirement benefits and the leadership/training you've earned and worked hard to get in the military. Airlines covet those. Also, don't worry about the low hours, don't get discouraged about that. There's no real way you're going to compete with the civilian guys in the number of flight hours. 3000 hours is average for a military guy, and that's who you'll be racked and stacked against at most airlines, other military applicants. Things that will lift you above the other military guys are leadership positions (DO, ADO, Chief of something), Instructor/Evaluator and any schools you can list (AIS, Safety school, etc).
As far as logbook, I took my original green folder to my interviews. Every airline I interviewed at had no problem with it, and knew exactly where to look in my ARMS folder. Don't make a copy of it, no one wants to look at a copy. Eventually, you'll want to transfer those hours to a logbook, I used LogBook Ten, but there's others out there.
It's an exciting time, I know how you feel, but its also a little intimidating. Let the younger guys in the military have their chance at leadership, you've served your country, time to pass the mantle on.
Good luck!