Best Approach to Loose Skin and Fat on Upper Arms?

Based on the information you've provided and your photo, you'll probably need an arm lift rather than liposuction. This is because if you remove a lot of fat in your upper arms with liposuction alone, you'll have loose skin that may not be able to retract to your leaner contour. This loose skin will make the results of your liposuction hard to see. An arm lift will remove the excess fat and skin to give you a better result.  

Congratulations on such a great weight reduction. You probably will not get enough benefit from lipoosuction alone, whether laser-assited liposuction or tumescent lipoosuction followed by Thermage external radiofrequency tightening After these procedures, your skin will not retract enough and you will end up seeking a plastic surgeon to do an arm lift, so I would suggest you see a board-certified plastic surgeon to discuss the type of scarring that is expected with the arm lift and other risks and consequences.
 

Liposuction is the fastest way to say good-bye to bulky arms. Usually, a tiny incision is made near the elbow and the cannula is passed all the way up to the armpit. Sculpting of the arm can be done at the same time as an arm lift, avoiding the need for multiple surgeries. Smart Lipo uses laser light to liquefy fat and tighten the surrounding skin. It involves less downtime and side-effects than traditional liposuction and is particularly good for small areas of fat deposits. An effective non-surgical option is Thermage, a non-invasive (no incision!) treatment that can tighten skin, and stimulate your body to make healthier collagen—the building block that provides structure to your skin.

 While  even heavy and moderately droopy arms can be recontoured very effectively with liposuction because the act of liposuction itself causes the surrounding skin to tighten and lift with  very large weight loss and severe hanging skin a brachioplasty will be the most effective procedure—but the trade-off is a big scar and longer recovery.

The best way to protect yourself is to consult a board-certified plastic surgeon who is professionally bound to engage only in techniques that have been deemed safe--after rigorous testing.