HDMI ARC

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Dolby

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One thing that I've never really read about or worried about over the years was HDMI ARC. But now I've done a bit of reading and wondering if my understanding is right :

Previously, your AVR was the 'brain' with all components attached to it - and a single cable to monitor. With ARC am I right in saying that now everything connects to your TV, and a single to your AVR?
If this is right, ARC is EITHER an HDMI or ARC, similar to an audio out? So if your TV has 3 x HDMI (including an ARC), you can only connect two devices?
Does ARC transport DD5.1 and up to Atmos / DTS X - or only DD5.1 / DTS?
Does it have anything to with control (CEC), or is that separate - so just audio?

If my understanding is wring - why both with ARC ?
Or is one of those convenience things for people with a sound car rather than a full HT?
 

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