For sleeping on my side alone, I usually tuck the hand of the lower arm into the neck of my shirt by the upper shoulder. I find this keeps me from rolling onto the actual arm and causing it to fall asleep, and also keeps it from flopping into an uncomfortable position. For cuddling, yeah, I don't think there's a great solution to the "fourth arm problem." If you find one that doesn't involve a hole in the bed, let us all know. :)
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