As stated, you can withdraw an applicaiton, as long as it has not yet been searched or published (whereby applicaitons are published after search). This will allow you to reapply with that subject matter at a later date.
Filing a PCT application can be done and priority can be claimed as stated. You do, indeed, have 12 months.
You might want to reconsider you strategy, though. Going through the PCT route gives you an opinion (not a patent) to the patentability fo your applicaiton. This is useful if you, then, go and apply for a full patent. However, if you intention is patent protection throughout Europe, it may be cheaper to use your current applicaiotn as prior art of an EP filing. This will save you the costs of the PCT applicaiton, which are not an insignificant amount. It all depends, though, on what you want to achieve.