You reported it. As far as the gun goes, the job is done. Unless it has sentimental value to you, a handgun isn't worth fretting over. You're not responsible for what is done with it after it was stolen from your own home.
The deductible on home owner's insurance usually starts at around $500. So unless it was special gun, just forget about it. Save up, and buy a new one.
The guy, OTOH, has likely earned what's coming. Be patient. With this many credible witnesses, and the fact they know the guy's name, it would be surprising if the police did not pursue a search warrant. They've done similar when a friend's laptop was stolen, even though there was even less evidence. No one was home, and she left the patio door unlocked, duh. But she had a suspect, who was already suspected to LE as a drug dealer. That was enough to get a search warrant. So seems like in some jurisdictions, as long as they have a name and address and witnesses to back the story, they'll go digging for w/e they can find. Even if they don't recover your gun, they might find other stolen goods or drugs. I can't imagine there AREN'T drugs involved. There's no way an adult human being in his right mind could do this and think he can get away with it.