Michigan will certainly have to replace a lot but they do return 19 on their two deep (throwing out guys like Peppers who are underclassmen but gone) and I think 20+ freshman played this season, which was a program record. They also have a few guys who should get 6th years which will help (Clark, Johnson).
Offensively, they return a lot of talent (Speight, Asiasi, Cole, Bradensen, Onwenu, etc.) but defensively they have turnover. A returning QB can cover up a lot on offense but the other side will need guys to emerge.
I think Michigan has recruited a lot better on defense at key positions, so I think they likely will be fine there and they have a coach who is a great scheme guy (Brown). They won't be as good as they were this season but they should be good enough with the schedule flipped in the odd year. It's easier to break a young team in at home against MSU/OSU.
OSU's two deep, if correct, shows 4 seniors. I'd count 6-7 guys who maybe could declare? Correct me if that is wrong (Samuel, Baugh, Conley, Lewis, Price, Barrett, Hooker) and maybe a few other guys who could explore it but shouldn't. A couple of those seem like 50/50 and I think Barrett is obviously back with how awful he has been throwing the ball against good teams. He needs another year if he really wants to have a decent shot at the NFL. Worst case, OSU will probably bring back a number in the 30's.
OSU will obviously be the favorite but Michigan should start to see some of the residual effects of Harbaugh's first two years of recruiting, especially on the OL. Guess we'll see.