Agreed that you are asking for trouble with the arms up but it definitely does not hit his hand or arm.
Yes, the picture above shows that. Some replays made it look like a handball, some not. The ref initially called "play on" but the linesman or the one behind the goal told him it's a handball. The referee had a good view and he should have trusted himself instead of waiting for his assistants to make the call.
Doesn't matter. I can understand the ref. If this was actually a handball, he would have been destroyed. Not only because it was against Milan and everyone remembers Muntari's goal, but also because this same ref made some big errors in Juve's favor lately. I won't blame the ref.
I do blame the quality of the referees in Italy. We did take advantage of some ref errors lately, but such mistakes are unacceptable. We'd all like Juve to win without such mistakes, and when we lose we also want it to be without amateurish mistakes.