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.
We cannot deny because for now even though Arsenal are a very good club but for Champions League matters it is clear that they are just an ordinary club that does not have any advantage in the championship competition but that does not mean they are bad because they are still in the Champions League zone it proves that they deserve to be there but not to be champions because seeing from their golden era even Arsenal always failed and their best achievements were only finals and runners up.
The Champions League is filled with great and great clubs in all the best competitions in Europe and it is very difficult for clubs like Arsenal who do not have any experience in the finals to compete because in the end even though Arsenal are currently a great club but in fact there are clubs that are even greater than them in terms of mentality, experience and club strength.