I'm not a coward... But I know I have to be stronger...
Arc is one of the four Warriors of Light introduced in the Final Fantasy III remake. Like Luneth, he is an orphan from the town of Ur, to the point that he and Luneth were raised as brothers. However, Arc tends to get bullied a lot, eventually leading him to go to the nearby town of Kazus to prove that ghosts aren't real.
Arc, much like Luneth and Ingus, is in fact based on a character from the Famicom version although, like the latter, he is based on an NPC; Outside of Kazus is a man camping out who gets spooked when the party approaches him, mistaking them for ghosts. While Luneth meets Arc in Ur, the spot in which Arc actually joins is very close to where this NPC was and similarly has Arc being jumpy.
An unused interaction with Desch reveals that Arc is 14 years old. As of the time of this writing, this has yet to be mentioned in other media.
The very first trait that the player notices about Arc is his cowardliness. Being the proverbial Luigi to Luneth's Mario, Arc begins the game being unable to stand up for himself as he's bullied by children who seem to be younger than him. He also shows a rampant fear of having to encounter ghosts, a fear that the unused text shows persists as far as the Wrecked Ship. Even when not particularly fearful, Arc has a bashful side, as seen in the unused text where Sara compliments his intelligence or when the rest of the party credits him with saving Saronia.
But Arc's more defining trait is his intelligence. Arc is the "smart guy" of the group and has a knack for picking up weakness in enemies. This is especially apparant in the unused dialogue where Arc more often points out weakness or gives general advice; Some of these were moved to the guests for the final game while others were cut entirely. He also picks up on oddities; He's the one who figures out the link between the Living Woods and Argus' men attacking Tokkul and an unused skit had him questioning why Gutsco wanted the Horn of Ice to begin with (answer: to get at the fire crystal).
In spite of his intelligence, Arc is not wise beyond his years. The unused text makes it especially clear that Arc can be juvenile when it comes to love, being easily fooled and, in one instance fooling himself. Additionally, Arc has a temper that can cause him to act out, with the unused Saronia text being the most stand out example.
Still, Arc is the Light of Kindness and there are times that he embodies this. He empathizes with Alus Restor and is determined to help him restore Saronia, later soothing Alus' concerns on the possibility of his father hating him. The unused text also has him speak quite favorably of Refia when she finds it hard to believe that a bard wants her as his muse.
Arc has an interesting trend with his portrayals, consistantly being portrayed as a mage and leaning heavily towards the Summon-related jobs.
Arc's signature job is the Black Mage: It's what he is portrayed as in the CG opening and both of his units in Brave Exvius are based on the job (with Arc's Freelancer outfit picking up traits of the job as he is awakened), the NV unit in the latter Brave Shifting into the upgraded Magus. Black Magic in Final Fantasy is usually calculated via the Int stat, and Arc's bookworm habits and perception in the unused text make it a natural fit for him (it doesn't hurt that it further cements him as being the opposite of Luneth, who prefers the physical Warrior). In Memory of Heroes, Arc uses the Black Mage job until the party finds the Earth Crystal, at which point, he switches to Magus. Arc's equivalant is also implied to be Teol, the Black Mage from the Final Fantasy I storyline.
Arc's interest in summoning is surprisingly consistent. In III itself, an unused skit has Arc try feverently to get a summoner to take him on as an apprentice, in spite of how difficult summoning can be. In spinoff materials, he has a heavy focus on summoning in FFRK despite being a White Mage (here linked with Leviathan) while in Memory of Heroes, he becomes a Summoner when the party reaches the Earth Crystal. Of particular note is Bahamut: In the novel, Arc hears Bahamut speak to him as the party is fleeing from the dragon, the dragon telling Arc to call upon him when needed. During the final battle, Arc is able to hear Bahamut once more and summons him to attack the Cloud of Darkness. Given the implications of the novel, it is implied that this is due to Teol the Black Mage, who was the one of his party to realize that Bahamut meant them no harm and convince them to hear him out.
Arc is depicted as a White Mage in Final Fantasy Record Keeper - the nature of RK means that each realm has characters that fit into a specific role, depending on the job they're modeled after. While Refia would be emacipated from her 'traditional' White Mage job in order to become a monk, the job was instead given to Arc. However, Arc's healing capabilities play double duty with his summoning skills. As a result, Arc is associated with Water and Holy elements in Record Keeper.
Arc is notable among the four protagonists for having a clear character arc (heh). His introduction sets the tone with Arc getting bullied by a bunch of children. Luneth appears on the scene causing them to flee, but when Luneth tries to help Arc he simply runs away instead. Arc decides to stand up for himself and goes over to Kazus to prove that ghosts don't exist. Of course, Arc is, in fact, a scardy cat and after Luneth accidentally spooks him, Arc decides to travel with him to be braver.
The second part of the storyline depends on when players trigger Topapa's fourth Mognet letter. The party returns to the Altar Cave to find the missing children, the same ones that teased Arc at the beginning of the game, trapped by bombs. After dispatching the enemies, the kids thank Arc, even saying they never expected to be saved by him of all people before giving him a crystal fragment containing the Onion Knight job.
Finally, there's the Saronia plotline. The party rescues Alus from a gang of ruffians and he and Arc become fast friends. Arc takes the lead narrativewise during this portion of the story and it serves to be something of a capstone for his character development, having gone from being bullied to protecting someone else from bullies.
Arc has a few storylines regarding him that go unused.
The more innocent of the two is in Gyshaal. When the party arrives, Arc points out a shepardess and her sheep and how cute they are. The party, on the other hand, notices that Arc seems more interested in the shepardess than the sheep. Arc decides to help her out and she recommends that he grab some greens to feed the sheep, which Arc does enthusiastically. However, the sheep don't take the greens and the girl laughs at him for looking like an idiot, leaving Arc self-conscious. It turns out that, since Gyshal doesn't get visitors often - much less one her own age - the girl decided to play a prank on Arc, though she didn't expect him to take her seriously. Luneth ends up encouraging Arc to forgive her.
Another, more drastic storyline is an expansion of the Saronia plotline. Arc, fed up with how Ingus and Refia baby him by reminding him to keep his temper in check, leaves to prove himself by looking for the key to the Dragon Spire (which is locked in this version) - although Alus ends up joining him in hopes of calming him down. Based on the text for the scene, Arc would have left the party, prompting the team to look for him around Saronia. First, they would find him approaching one of the owner of the Dragon Spire key, who mistakes him for Alus - a minor plot point of this section that doesn't come up much in the final is that Alus is hiding his identity. Thus, Arc pretends to be Alus - albeit not being experienced with acting - and gains the key to the Dragon Spire. The two then go to procure weapons from a weapon shop rumored to have defied the king's orders and remained open. Following him there, Arc is at the counter and asks the shopkeep for the best weapon. It costs 10,000 gil, which is money that Arc doesn't have. Alus offers to cover the bill, but that will assuredly blow his cover. So Ingus, as he apologizes to Arc, gives Arc the money needed to buy the spear. But Arc is ashamed, feeling that its all his fault. Alus assures him that it's no one's fault.
Having grown up together, Luneth and Arc have a modest sibling bond. While the game does point out how they tend to be foils of each other, it doesn't mention that they can be on the same wavelength at times, especially when it comes to girls; whether it be being jealous of Desch for having his girlfriend fawn over him or somehow deluding themselves (and even Ingus) into thinking Unei is a sleeping Princess. It's implied early on that Luneth is in charge of protecting Arc and, for his part, shows that he can do so; Some unused (and actually translated) dialogue at the beginning of the game has Luneth patch up Arc's bruises with healing flowers, and in Gyshal, some unused (but not translated) dialogue has Luneth cheer Arc up after he gets tricked by a nearby sheperd girl.
That's not to say that it's all perfect, however. Luneth's flippant and prideful attitude sometimes causes Arc to call him out on stuff and when Arc leaves the party in Saronia, Luneth is the only one not worried, mentioning that Arc threw tantrums all the time in Ur. Still, Arc does rarely show that he can dish out what he can take, mocking Luneth during the Duster subplot.
Early on, Arc and Refia don't have much of an explicit dynamic; Arc isn't particularly nice to her, but he also doesn't actively drive her up the wall like Luneth and Desch do. That said, what little we do get primarily paints it as negative, at least to begin with. In particular, a recurring trend seems to be Refia getting mad at the boys only to get rebuffed; Arc defends Desch when Refia assumes that he just walked out on Salina, and when Refia points out that Unei is more likely to be an old crone than a beautiful princess, Arc merely assumes that she's jealous. Additionally when Arc has his tantrum in Saronia, while most of the focus is on Ingus, Refia is also included in his rant. But, all of this is contrasted with the Bard subplot in Duster where Arc encourages Refia to give the bard a chance, such as offering a gift. Arc compares Refia to a Maiden's Kiss (an item) or a Madra's Harp. He even stands up for Refia when Luneth teases her, saying that Luneth is shy and could use a lesson in honesty from Refia.
Arc and Ingus' dynamic depends on what perspective you view it from. From Ingus' perspective, it's clear that he's looking out for Arc, most notably chastising Luneth for mocking Arc. From Arc's perspective, however, he seems somewhat resentful of Ingus' concerns, particularly when Ingus refuses to let him stay in Replito to learn summon magic. It comes to a head in the unused text for Saronia when Ingus and Refia try to get Arc to control his temper, only for Arc to throw an epic tantrum and leave to find the dragoon equipment by himself.
Alus is the guest whom Arc bonds with and who Doga calls upon to save Arc during the climax. Arc and Alus' bond is a very clear one - One of the party conversations has the other three party members take note of how close Arc and Alus are while the two stand a ways off, speaking with each other, and while the Famicom version had all four party members in one bed and Alus in the other, Arc is the only one to share the room with Alus.
The unused text goes even further with them, as hard as it can be to imagine. When Arc leaves the group to find the key to the Dragon Spire, Alus goes with him to see if he could change his mind. Wen Arc is hesitant to take the Dragoons' treasure, Alus reassures him that they would love to see him use it, boosting his confidence.
A lost in translation aspect that the unused text uses heavily is that Alus refers to the Warriors of Light with "-san", the equivalant of "Mr.". By the end of the storyline, Alus drops "-san" when addressing Arc. So while Arc isn't offered a position like Ingus and Refia were, he found that much more significant.
In Final Fantasy Record Keeper, there exists an event known as the X Records. The event's final (and, in fest re-runs, only) battle was against Nemesis from Final Fantasy X. However, having certain parties would result in short skits using dialogue from the original games. In Arc's case, his teammates were Edward from Final Fantasy IV and Irvine from Final Fantasy VIII. The theme is Cowardace and wanting to be stronger, which fits (for Arc and Ed at least).
Arc's dialogue is taken from his first words in the game (about not wanting to be a coward and wanting to be stronger) and his words to Alus about him making a good king (reworded slightly to address Edward).