First we'll make the vanilla game look and run much better with a few DosBox configuration edits

Open the arena.conf file located in steamapps/common/The Elder Scrolls Arena/DOSBox-0.74/
and make the following edits:

Game Performance
The edits will provide a huge performance increase when running at maximum detail
1) Under [cpu] change "core=auto" to core="dynamic" (NOTE: be cautious with this as while highly unlikley, some users have reported their machine crashing when using a dynamic CPU setting)
2) Under [cpu] change "cycles=fixed 20000" "cycles=max"

Visuals
This edit will provide a nice looking scaler for the game (see screenshots), giving it a more modern feel. If you don't like this scaler, you can use "normal3x" instead
1) Under [render] change "scaler=normal2x" to "scaler=hq3x"

HQ3X is the preference of myself and many others as it makes pixels slightly smoother and edges slighty rounder, giving it a more or less "remastered" effect.

All these mods come from the nexus and will modernise components of the game, such as key mapping and sound, as well as fix minor errors such as spelling mistakes.

This mod will modernise the controls of Arena, I.E using WASD for movement and SPACE to jump,
NOTE: To input letters, you need to hold left ALT while typing. All the key bindings can be found of the mod's page.

TES Arena Remapped[www.nexusmods.com]

Installation: From the folder telling you to put these files in the Arena folder, take these and instead place them inside the DOSBox-0.74 folder

This mod is optional, however some of you may have noticed a very annoying click sound played at the start of various sounds, such as swinging a weapon. This mod removes these (I recommend not downloading the optional file as it removes some necessary sounds based on the author's personal preference)

Sound Patch[www.nexusmods.com]

Installation: Place all files into the ARENA folder

These mods will revamp the UI and font, giving it a more clean look as well as fix various errors such as spelling mistakes in the game intro etc

TES Arena Refonted[www.nexusmods.com]

Installation: Place all .DAT files in the ARENA folder

Choose Between These (I recommend IntuituveUIv2)
IntuitiveUIv2[www.nexusmods.com]
Clean UI[www.nexusmods.com]

Installation: Place all files in the ARENA folder

TES Arena IntroFix[www.nexusmods.com]

Installation: Place all files in the ARENA folder

Opening Fix[www.nexusmods.com]

Installation: Place all files in the ARENA folder

TES Arena Title Screen Fix[www.nexusmods.com]

Installation: Place all files in the ARENA folder

If you've played Arena before, you may know about the deleted upper floor in Stonekeep during development. This is where Queen Blubamka of Rihad sends you to retrieve the parchment stolen by Golthog in return for the location of Fang Lair. This incredibly ambitious mod is probably the only available true modification of the game itself and restores the deleted level where Golthog can be found. I've tested this and it seems to work find, it even adds Golthog as an NPC, however I recommend installing this on a second play-through, or a new save for the sake of curiosity.

Stonekeep Restored[www.nexusmods.com]

Installation: Backup the file "39699021.MIF" and place the contents into the ARENA directory

Finally, the following settings need to be changed in game

Detail Level
Press ESC to access the in game settings and drag the details slider all the way to the right.
If you wish to push the detail distance even further, a seperate guide can be found here using CheatEngine

Increase View Distance Mod[www.nexusmods.com]

Pixelation
This step is optional however highly recommended. Disabling pixelation will make any dialogue or interaction windows etc appear instantly rather than fading in, which takes a bit of time. To do this, simply press F4 in game and save.

Whilst highly unlikely, the DOSBox settings may be too much for your device to handle. If this is the case, keep the core as "dynamic" and revert the cycles back to "fixed 20000". You can change the cycles in game by pressing CTRL+F12 to increase the cycles and CTRL+F11 to decrease.

I also recommend setting the arena.conf file to read only as steam may revert it, although this game won't be getting updates any time soon ;)

Thank you for reading this guide and enjoy your game. It's an amazing and underrated TES game I think every elder scrolls fan should try.

For a complete walkthrough of the game, have a look at this playlist by WoodenPotatoes, it covers everything there is to know, including gold exploits, development information and lore.

WoodenPotatoes Arena Full Walkthrough

If enough people find this helpful I may make a complete modding guide for Daggerfall Unity (which has many more options)