1 - The "24" penalty states to drop your highest drafted player in order to comply with FUNDS (draft $'s) ..and pick up another cheaper player at that letter to give you availability.
2 - ...but if a LETTER is needed also the you will need to make a drop (as wockenfuss said) of THAT letter (for which you need a Pilgrim) and pick up the Pilgrim.
However, if you have enough FUNDS (draft $'s) with just part the part 2 above add/drop then that's fine....but if you need more money then you need to do part 1 also