Is this bluetooth setup good?
Which code are you reading? At step 5 he wrote


  Complete code can be found on the GITHUB.


The sketch file (here is the direct link) has the following lines:

const int rxpin = 11; // pin used to receive (not used in this version) 
const int txpin = 4; // pin used to send to LCD

SoftwareSerial blue(rxpin, txpin); // new serial port on pins 2 and 3


This means that the bluetooth is using a software serial on pins 11 and 4. 

I don't know where you got the image you posted, but anyway that wiring is not the same as the one in the instructable. With your wiring, you can either use the software serial on pins 0 and 1, or (better) use the hardware serial. To do so, remove or comment the lines I highlighted and then replace every call to blue with Serial.