Hi everyone,
I am an ex-guitarist, and keen to learn bass. Got a good deal on an entry level one, and have been checking out a few Youtube basics.
Now right from the start, I have an issue.
I have no idea where to position my right hand (arm). 
If you look at the picture, this seems to be how many players do it, with the arm / palm resting on the guitar. But you can also see what a terrible angle that makes for my wrist and forearm.

It feels like there is no space for my arm on the guitar to rest on while maintaining comfort and not stress. 

Your input would be greatly appreciated.
The short answer (and probably not so helpful), is that you should use an arm/hand position that is most comfortable for you (it's all subjective). The longer answer is:

Assuming you are right-handed. Keep your wrist as straight as possible. Adjust the strap - too short and your right wrist will bend, too long and your left (fretting hand) wrist will bend. In the picture it seems your wrist and forearm is positioned near the bottom/heel of the bass - move them over the top (over the pickups and perpendicular to the neck). This will work regardless of whether you play over the neck or bridge pickup.

Here is a good video lesson:  
Hi there,
Thank you very much for your input. It really pointed me in the right direction .I will work on this. 
Much appreciated.
looking at that photo it would be fine to rest your arm like that if you are using a pick but if you want to use your fingers you need to learn a classic braced thumb with your hand just short of a  right angle to the strings
Hi Phil,
Thanks for the input. I think I am on the right track. The angle seems to come a bit more natural when I stand and practice. But my right arm still floats somewhere in the air because I can't really rest my arm when I move up and down the strings. Maybe it is just a matter of building up some strength and getting used to it.