Col1
----------
1
2
3
4....all the way to 27
I want to add a second column that assigns a number to groups of 5.
A bit of math can go a long way. subtracting 1 from all values puts the 5s (edge cases) into the previous group here, and 6's into the next. flooring the division by your group size and adding one give the result you're looking for. Also, the SQLFiddle example here fixes your iterative insert - the table only went up to 27.
SELECT col1,
floor((col1-1)/5)+1 as grpNum
FROM tableA