Historically, composers drew no distinction between composing and arranging. Bach, Mozart, Beethoven, virtually every composer since has transformed existing melodies for their own purposes.
I don’t think of the last movement of Beethoven’s Ninth Symphony as an arrangement, and neither do you.
The simple truth is that good arranging is identical to good composing – you are making definitive choices about timbre, instrumentation, voicing and harmony to serve your communicative purposes.
The only difference is that you didn’t write the melody for an arrangement. And that’s probably a good thing, since the timeless melodies we arrange are often better than the forgettable melodies we compose. Just ask Beethoven.
As far as I see, there is no substantive difference between the two in terms of the work or the potential to make listeners feel feelings.