I don't mean my wrist, which I try to float..but my arm--should it be resting on the body of the guitar? I feel like sometimes this limits me. For clarity's sake, I mean that I rest my upper forearm, near my elbow joint, on the top of the body of my guitar, parallel to the bridge. It's a taylor 214 auditorium acoustic, fwiw.
If it's just resting on the guitar, then no problem. But if you're anchoring your arm to the guitar, me and most other people on this site would recommend that you change it. Since you said you feel like it limits you, I think you are probably anchoring and should change. It's fine it it's just resting there, but if it limits you, or if your arm needs to be in a fixed position to play, it's anchoring.
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Junior's usually at least a little terse, but he knows his stuff. I've always read his posts in a grouchy grandfather voice, a grouchy grandfather with a huge stiffy for alternate picking.
Besides that, he's right this time. As usual.
It should be the way you feel most comfortable with it.
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i think it's kind of unavoidable to rest your arm on the body of an acoustic guitar. as long as it isn't restricting your movement when doing large movements like strumming or string skipping.
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I agree with those who say that you should play the way it is comfortable to you, because regardless of techniques or different opinions from "experts" I believe that it all comes down to what feels good to you.

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I would say the main thing to keep in mind is that dexterity on the guitar means being able to play it in many different ways, they way you play it might be good for some styles but more difficult for others, don't let how you hold the guitar limit you. Many people hold their guitars differently. What matters is being comfortable and relaxed while play.

As a side note, there is one position I play guitar in where I feel like I am much more free to do whatever I want and it only happens when I have my left foot on a small box and the guitar on my left leg. I am right handed so this might seam like a weird playing style for most people but it works really well for me so I wont change it.