Confused on how to use "instead" in the middle of a sentence

Solution 1:

To correct the punctuation before instead, you can use either a period or a semicolon to bring the previous thought to an appropriate halt (or pause). In addition, I recommend altering some of your other word choices to yield a more idiomatically smooth end result. The versions I prefer are

I am dumbfounded that the man does not spring to Walton’s aid. Instead, he makes sure the vessel is headed North.

for the version with a break into separate sentences, and

I am dumbfounded that the man does not spring to Walton’s aid; instead, he makes sure the vessel is headed North.

for the version with clauses separated by a semicolon.