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try this:

for i in {1..$#}
do
eval echo $`echo $i`
done

Or you can put the variable behind the program like this:
awk -F: '$1==VAR' VAR="$THEVARIABLE" /etc/passwd

Variable assignment in awk is preceded with the -v option.

Also note that awk is capable of reading file by itself, there is no need to cat and pipe the output to awk:
awk -F: -v...