From the Lutheran POV the succession of bishops from the apostles is historically true, so it isn't rejected. However, apostolic succession is not treated the same way in Lutheranism as it is in Catholicism, Orthodoxy, or even Anglicanism; it is not considered necessary. So, as an example, in the Holy Roman Empire where most of the bishops remained loyal to Rome, the Lutheran churches did not have bishops overseeing them. On the other hand, in the Scandinavian countries, particularly Sweden, there were bishops who embraced the reforms--most importantly the Archbishop of Uppsala, and the Church of Sweden retains apostolic succession, whereas the German Lutherans did not (and this became more muddied and complicated later with the Prussion Union in which there was a forced union between Lutherans and Reformed, leading to Lutherans fleeing for religious freedom in places like America and Canada).
Lutheranism has never mandated a particular ecclesiastical polity, which is to say from the Lutheran POV there is no divinely commanded way on how to organize the Church. In North America most Lutheran bodies follow a basically congregational polity, though the ELCA when it joined with the Episcopal Church in altar and pulpit fellowship adopted a semi-episcopal polity, which is why the ELCA has bishops--though things still broadly follow a congregational model.
Apostolic Succession, then, is historically true--it can be observed historically. It was important, especially in the early years of the Church. It's therefore completely valid. Is it necessary? No. So if it should be followed is less important than being faithful to the apostolic faith itself. Holding firm to the apostolic word in Scripture, confessing and believing God's word, and holding to true faith is far more important to Lutherans than whether our pastors are "validated" through the historical succession of bishops.
The apostolical ministry is preserved in the pastorate--bishops and presbyters. So those who call themselves modern-day apostles would be viewed from a Lutheran POV as misguided at best, and grifters at worst.
The existence of Paul as an apostle means that no, there were more than just the Twelve. There were the Twelve Apostles, St. Matthias replacing Judas Iscariot. But there was also Paul, Barnabas, Apollos, and many others--Scripture attests to this. There is no exhaustive list of how many apostles were around in that first generation, but tradition talks about the existence of the 72 apostles.
The Twelve obviously held a special place of importance, at least initially, as it was viewed as important to retain that number of 12 by replacing Judas with Matthias. However, after the election of Matthias to the Twelve no additional mention can be found, in or outside Scripture, for retaining the Twelve. After St. James the Great died around 44 AD, as mentioned in the Acts of the Apostles, the number was again reduced to 11, but no attempt is made to replace James with anyone.
And this is generally why the traditional account of St. John's death sometime around 100 AD is viewed as the death of the last apostle and, therefore, the end of the apostolic era; it is followed by the sub-apostolic era, the era of the "apostolic fathers", those early fathers of the Church who knew and learned and were friends of the apostles and who were often appointed by the apostles directly to their episcopal chair.
I view Apostolic Succession as completely valid. I just don't view it as a necessity for the functioning of the Church and the Church's exercising of the Keys and retaining the sacred ministry of Word and Sacrament.
I'd even, speaking personally here, say that Apostolic Succession is ideal. But it isn't what validates other things in the Church; the word of God and the faithful confession of the Church are what validates the Church as the Church: Here is where God's word is, here is where the Sacraments are celebrated, here is where repentance and confession happens, etc. This is what validates the Church as the Church of Jesus Christ.
-CryptoLutheran
