But if in LUA you must run Arcade Games and cannot save the game
LUA is a scripting language used to script Bully.
It is NOT JUST for Bully, it is for tons of things.
It wasn't made to just edit Bully's arcade files.
It does however allow you to make new scripts, that you can then replace with a Bully script.
An arcade script, is used frequently because it can easily be started and it won't throw any other code off.
But you can also edit any script in the game, but if you miss some things that should be in the file, it may mess up.
You could edit missions, punishments, the time cycle (Used commonly to mod in freemode) or any script in the game.
However, unless you can decompile the compiled versions of the LUA scripts you cannot edit them.