Learn English – How long would the conference be for

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.

At first glance, there seems to be nothing wrong with that sentence. A long time is just another period of time, like a week or a year, and it can be substituted for those:

I have been working here for a week.
I have been working here for a year.
I have been working here for a long time.

So it makes perfect sense to use it in a similar way in a sentence like:

I met him a week later.
I met him a year later.
I met him a long time later.

However, it somehow feels “off”. I suspect this may have to do with the fact that we can convey the exact same meaning in a more concise way:

I met him much later.

Indeed, if we look at Google nGrams, we see that both a week later and a year later are commonly used, but a long time later, though it is used, is very rare. Much later, however, is used as often as a year later.

So, in conclusion, the phrase is correct, and it is used (if rarely), but the more common, more idiomatic expression would be much later.