I submitted my first app that required a device and one can't test it without it - it also got rejected the first time. Here is what you need to to:
- Make a video that shows your apps functionality starting from pressing the app icon
- Slowly go through the screens so one can follow. It is also helpful to add some explanatory text
- The video does not have to be professional, but it needs to show all the main functionality
- You may use all sorts of recording techniques, but the easiest I find just to use another iPhone. You may spend as much time as you like making the video professional.
- Make a note for the reviewer and add the link to youtube so that Apple can easily get to it
That should do it.
