Latex seems to be misbehaving, so I'll write in plain text:
In the Frobenius substitution, the x dependence of the first term is already factored out:
y(x) = x^r Sum (a_k x^k)
So, the first term in the series is actually
and when we plug the series into the differential equation, the question we are asking is "What is the smallest r for which a_0 does not vanish?" The answer is given by the indicial equation.
After solving the indicial equation for r, we are then equipped to ask the next question: "Given that a_0 does not vanish, can I find some sequence a_k such that my formal sum converges and solves the differential equation?"