I think Arsenal have had a pretty impressive period in the domestic league this season. In the Champions League, Arsenal have 4 remaining matches which they can use to improve their performance. Arsenal will face Sevilla next week, where arsenal will probably be focused enough to get 3 points in order to take the top position from Lens. But if Lens manages to secure full points against PSV, maybe arsenal will need to work hard when they meet Lens in the second leg.
Yes, Arsenal is 2nd place now. They are in the race of the competition of EPL trophy. After beating Man City at their home, I assume Arsenal players will be more confident. It can boost their morale/motivation in UCL matches. I'm sure they will target to win against Sevilla in the next match, they need 3 points to increase the chance to qualify for the next round.
I'm not worried about Arsenal performance in the Champions League because they are quite the favorites to qualify for the last 16. However, they have to fight hard if they want to qualify as group winners. Sevilla will try to break arsenal spirit in next week's match if they manage to beat arsenal. But if arsenal wins the match it could be that the competition will be more interesting in the upcoming match because arsenal and Lens will both be fighting to become group winners.
Arsenal must win in the next remaining matches in UCL. If they expect to qualify for the next round, they must defeat Sevilla first. I believe Arsenal has everything to beat Sevilla, they have a better quality of players and they are also in a good mood after winning against Man City in EPL. I really expect that Arsenal won't miss 3 points when they play against Sevilla.