Narayan,
To use CCS5 with the DM37x I would first recommend referencing the CCSv5 Getting Started Guide. The Getting Started Guide provides a step-by-step procedure for creating project, building and debugging your non-OS code in CCSv5.
In the process of creating your target configuration TI recommends you select the OPMAP3630 and add a GEL file to initialize the DM37x.
The AN 529 Creating a Hello World Sample Application in CCS v5 for DM3730 - AM3703 SOMs application note documents a step-by-step guide for configuring DM3730/AM3703 development kits with CCSv5.
If you are having issues connecting to the ARM core try setting the emulator to use Adaptive clocking. Check the short video clip Changing the Target Configuration Properties of the TI Quick Tips page.
TI has a StarterWare package available for the TI AM3335x processor. This includes drivers for UART, DMTimer, LCD Raster, TouchScreen/ADC, Ethernet, EDEMA, RTC, GPMC, NAND, USB, and SD/MMC. Here is a page describing the differences. It might be possible to use some of the examples in the StarterWare package.
Below is another example of a CCS project for the AM-DM37x.
Power Management CCS project for OMAP35x and AM-DM37x