A while back, the bolts holding the shocker plate to one of my front arms snapped and my cack-handed attempts to drill them out mullered the threads. I sorted it by just drilling the holes a bit bigger and fitting bols with nuts on the far end to clamp it all together, but i'm not convinced its the best solution as they seem to come loose pretty easily.

I don't really want to drill and tap the holes now as i'm worried i've already weakened the whole bit by widening the existing holes. Would I be able to cut the lugs off of an old arm and weld them on? Would it be strong enough and not cause headaches at MOT time? I seem to remember something in the manual about 'suspension modifications'.

Cant find any acad arms out there so fixing the current one seems to be the way forward...

Why butcher another arm to fix one?
Get some thick steel bar, cut, weld, drill and tap. M10 is probably the most logical choice because of the difficulty to get a proper M9 tap. Also high strength bolts are easy to obtain in M10.
This could be a nice solution as well: http://www.vgs2cv.be/images/myfolder/La ... sflens.jpg

I have a couple of arms that the kingpin holes could be described as 'cavernous'. I figure they're useless now, so...

Whether it's a a good idea depends on the quality of your welding. The mot rule is very open to interpretation, if it's done properly there won't be any problem.