P.G.
I'm going to sound mean, I KNOW you love your son because you wouldn't be asking the mamas for help, but from your letter, he sounds miserable because no one is paying attention to him. His bio-dad isn't involved, your husband seems to not be involved either, and you are involved in so many things (work, toddler, etc) that you're not really involved with him either (in your own words, you "just realized" you didn't help him connect with other kids when he lost his friend connection).
He needs discipline when he does bad things - that's true, but you need to get the whole family on board and showing more love and affection/attention to this little boy or there's going to be a LOT of trouble down the line. You say his personality seems to have changed, and I would guess that he's depressed by the whole situation (though I'm not a therapist). Your husband needs to get on board with this - when he married you, he married your son too and YOU need to make him realize this and deal with this.
I don't know if you'll need family therapy, but it'll take time to turn this around. Use the summer as much as you can. Each of you take time to have a day with him (or night) - just with him. Get a sitter for your daughter and BOTH go out with him. He needs to know you care - you have to SHOW you care. Even adult like to hear it and feel it, even when they KNOW someone loves them. He's only 5 and he's not old enough to "know" someone loves him if they don't act like they're interested. I know life is busy and hard (believe me), but we can't let our little ones fall through the cracks.