season one shows more of his flaws. as time goes on, the show actually focuses on him less.
above all else, arnold's an idealist. in arnold's christmas, he thinks he can deliver a miracle (which is a bit of hubris on his part, attributing it to christmas). then, when things don't work out like he wanted, he basically decides there's no such things as christmas miracles. it kills a part of his worldview.
in stoop kid, he's so hellbent on helping stoop kid, he never questions if it's really a good thing. in the end he teaches him how to deal with his agoraphobia, but he winds up creating a more dangerous bully than before.
in season one, he's hopelessly infatuated with ruth, who is pretty shallow. i think if he hadn't met 'cecille', he would have left dinner on valentine's disillusioned with love. in seasons 3 and 4, his relationship with lila is showcased again and again, and he keeps getting rejected no matter what he tries, thinking he might be able to change her mind if he treats her a certain way or acts a certain way around her. sometimes it leaves him melancholic. other times it gets him angry (like arnold's weird cousin).
the other flaw is that he... sort of has a temper. it's not explosive, but it shows up fairly often. at the end of 'the list', he's pissed because not only was he not able to get everything on the list done, but it all went horribly wrong to boot. he retaliates against helga and spills paint on her after she got it on him. he tries to get oskar and susie back together just so he can get oskar out of his place (and berates oskar when it doesn't work out). in 'mugged', he attacks someone when all they were looking for was the bus stop.
he kind of reminds me of aang from avatar: the last airbender, except more low-key.