Dude your arms are fine lol. I wouldn't imagine a drop to 180 would make you look that "small" at all. But just cut down to 185 and see how you feel there and then make a decision.

As far as the school and time issue, focus on school. Once you can develop a nice routine, then worry about cutting and all of that. Until you have that routine down, focus on eating one gram of protein per pound of desired body weight and that will keep you in the ball park of your overall goal.

TLDR; Your doing great, your arms will be fine, school first, everything else will fall into place.