The step 1 is not low enough to be out of the cutoff zone for a lot of the upper tier programs, so that should be okay. No honors in IM hurts you with the combo average step 1 score. The things that will decide where you go from here ASSUMING Step 2 CK score 250's:
1a. Letters of recommendation (slight edge)
1b. Reputation of your medical school (this does make a big difference... with a 230 from certain programs you might not be interviewed at the best programs but if you go to an upper level medical school, that alone could make a difference in IM for some reason)
2. Research (looks like you're good here, a lot of people match with an abstract, or abstract+pub to upper tier programs)
It does not exactly "make up" for an average step 1. It just adds to your CV separately. If you got a 260, people will still look at the step 1 separately. I don't think it is so low that it will screen you out as I said before, but some upper tier programs have average step 1's in the mid 240's. If you are not an elite candidate on the academic side, it does hurt that you did not honor your rotation. For example, if you got a 250+ on step 1 but high passed IM, that would be fine, but I still know people who were not interviewed at some places who were otherwise stellar applicants because no honors. This is all assuming that you are targeting an upper tier program. Elite programs are more like top 20; upper tier is like top 35. There are tons of programs at the lower end of the top 50 who do not touch a 240 average, so if that is all you are targeting, you don't need to worry at all. I think if you kill step 2, you will have some nice options in the end to match into whatever fellowship will make you happy. If you are not planning on applying to a fellowship, I would rethink your plan of applying to IM.