I think Arsenal doesn't have to make a major overhaul to become champions because they already have a pretty solid squad and a good coach. At most, they only need to sign a few players who are really needed and don't have to make changes on a large scale. Arsenal's real problem is that they still don't have the winning mentality that Man City and Real Madrid currently have, and I think if on several occasions they can reach the final, it will form that necessary mentality on its own.
Arsenal are not missing out on anything not to be a major contender of the champions league just like Manchester City and Real Madrid have been over the years now. Arsenal are a great team and they have all it takes to win any trophy now. Just like you’ve mentioned, they just lack that winning mentality and that is what have caused them to not have win any trophy for themself till date despite the great performance they pull up every season. If they can have that winning mentality and their mind set at making sure that they get what they want by all means, they can win a trophy in the next season. I have so much believe in them but they always disappointed towards the end of the season.
That is the main problem for Arsenal, and they need to solve it, because how can you be performing well and making fans believe with them that they will win the title and then disappoint at the end, so whenever they are winning matches, I know that they will perform poorly at the end, and how can you perform in two seasons and still not get the opportunity to win the trophy, allowing Manchester City to win back-to-back in the Premier League? Arsenal must first win the Premier League before they can take on the champions league because with how they are doing they will be always be knockout in every round of 16th. So let see if they can escape in the Champions League this team because anytime they join them with big club they don't succeed. Arteta is the head coach and is him that will improve the quality of the team.