It's a gray line and a rather tricky question to answer, since people do use both terms interchangeably at points.
Arrangement usually means you're taking someone's ideas and elaborating on them, either to complete an idea, reharmonize, add instrumentation, or redo a piece of music completely in a different genre. This process can include orchestration work.
Orchestration usually means you're taking a piece of music and making it playable by an orchestra (which can refer to many things, but typically nowadays refer to a classical orchestra, i.e. strings, brass, woodwinds, orch. percussion, etc). This also implies an arrangement for orchestra if the original music is not orchestral (i.e. orchestrating 16-bit game music), but also is a term used for a 'playability' pass on a piece that was composed originally for orchestra to begin with. A professional orchestrator will prevent situations where, for example, you're trying to get horns to hold notes for 30 seconds straight, which is physically impossible. This process hence can also include arrangement work.
Shota deserves recognition for how much he went above and beyond for the soundtrack. As he said in the interview linked on the first page, he did cover a lot of different roles, and was basically *the* point man for the entire recording process for much of the soundtrack with Video Game Orchestra and SoundtRec involvement.
It seems to me (and this is speculation on my part) that the crediting process essentially defaulted to "Arrangement by Yoko Shimomura/Shota Nakama" for tracks with VGO/StR involvement, and then modifications to that default whenever there's a special case. For the most part, it's correct, and Shota did arrange and/or orchestrate for those, although it's a little superfluous to still say Yoko Shimomura still arranged those pieces (she did compose them, after all, lol), and it leads to a situation where this default information can be incomplete or inaccurate or overlooked, e.g. Magna Insomnia not crediting Sachiko Miyano, or Crystalline Chill, which I pretty much arranged and produced based on Shimomura's basic outline.