You need to buy a bonsai book and do things in a different order.
You might want to write this plant off.
If you would like to keep this plant as a bonsai, first learn how to keep an azalea as a regular potted plant. Then once you can grow that, then learn the art of bonsai.
What your trying to do is go scuba diving before you learn to swim.

Bill's right about everything, but just a couple of tips for future... when a book says 'indirect' light they may be referring to outdoors, where azaleas don't do well in intense full light all day, but are better in light shade. However, that is still way brighter than indoors would be. Also they're no good if they dry out, and scheduling watering doesn't work, especially if they're originally grown to bloom early (as they often are by nurseries), which would make winter dormancy not as relevant, especially indoors. They are one plant that needs consistent watering, but not consistently sodden-ness, so you also need to take the type of soil mix into account and learn to read the signs. It does sound like it rotted early however, unable to handle the water it was given either by you or the store, from your description of the leaves, etc. Plus 65 F. is too warm and 40 would be ideal for winter (which also makes it hard to keep without having a cold basement or porch, etc.).

It may be that your azalea is having an indignation session after being moved from a snuggly glasshouse to a store to your room.

First up - have a look at the potting mix. Often little azaleas are shipped in mix with a high peat content because it's lighter. However, indica azaleas seem to prefer something that both holds moisture - and lets the excess drain away.

They are not fond of being deeply planted, or being in too big a pot. You mention that you can see roots sticking out. It is possible that it was poorly planted in the first place and, with things looking a little dire at present it could be worth repotting.

The yellow balls you see may be slow release fertiliser balls. They can look ominous. If you squash one there's a sort of shell left and the inside is often semi liquid.

If you are going to have a go at repotting choose a plastic container with at least one, thumb-wide hole in the bottom - or plenty of holes. Let it be no deeper than three inches and no more than half an inch wider than the root ball.

Choose a potting mix with no water crystals, and little to no fertiliser. Go for one that suits acid-loving plants. Also get some sharp grit that's about 1-2mm (millimetres) diameter. NOT sand. Allow about one handful of grit to two of mix.

If you're concerned about mix drifting through the holes - line the pot with a facial tissue. It will let water through and eventually rot away.

Into the new pot put in about an inch of your well-stirred mix'n'grit. Tap the pot on the bench to settle it a little. Make a mini-cone of more mix in the middle of the pot.

Gently take your wee plant from its present container and let the old dirt fall off. It is absolutely important that you leave the roots alone: no snipping.

Trickle in the mix to barely cover the roots. No poking or pressing, please. It's done when the stem is clear, there is a small slope on the mix away to the edges of the pot, and the roots are thinly covered.

Now put the pot into a container of tepid water and wait until the bubbles stop rising. Bring it out, let it drain, add a little more mix if watering has revealed any roots. Then cover the surface with more grit - leaving the trunk clear.

On the matter of sunlight: I am accepting that Arizona sunlight and summer temps can be more than I get - although our UV ratings are horrendous due to holes in the ozone layer. That being so - indicas will take a fair amount of direct morning sunshine - and like to be in fresh air. It helps for them to get that sun as it seems to greatly improve flowering. If you can put your plant outside during the day over spring and summer - even into autumn - it will be healthier. A north-east location may suit best. They are frost tolerant to around -5C although the flowers turn to mush when it's that cold.

What you may find is that you get dieback on the present stem structure and new growth coming from the base of the plant. You will have to start over with reshaping, though.

It takes AGES for an azalea's roots to colonise a pot so be knowing that you'll need to take care when moving the plant. No fertiliser until March. Let it get its breath back...

When azaleas dry out they can develop leaf gall. It's better to water by plunging the pot as you do when repotting than trickling water on with a watering can because that fine root mass can shed water better than a raincoat.

Remember to turn your plant a quarter each week so it grows evenly.

Later on - in a year or even a little longer, you can think about putting it back into a formal bonsai pot. There's no rush.

Good luck ;-).