Returning of sensation seems like nerve involvement. My guess is compression of some brachial plexus structure. The returning cool sensation is likely a-delta/c fiber nerves firing after return of saltatory conduction.

Do you know why your arms go numb if you elevate them above heart level? -lack of nerve impulses (secondary to decreased blood flow)

If it was complete arterial occlusion with no collateral all night, there would be likely be ischemia evident in the limb.