There are always a few teams that can be favored every season regardless of how they performed last season. Real Madrid and Barcelona are the favorites from La Liga, Manchester City and Liverpool from the Premier League, Napoli and Inter from Serie A, Dortmund and Bayern Munich from the Bundesliga and PSG from Ligue 1. I agree that the above teams can fail in the early stages or in the knockout stages, but I am sure one of them will be in the final.
Exactly. These teams always become the favorite teams in every season of UCL competition. There will be no significant change on the favorite teams but there will be always a chance of surprise results. Sure, it is not impossible that those favorite teams can't survive in the early stage. They can be eliminated in league phase, round of 16, or in quarter finals. Well, actually there is no guarantee that one of them to reach the final round. In theory, the final of non favorite teams is not impossible. But it is just a small chance only.
We certainly don't know how the team will perform next season. Each of them will build their team as best they can and they also prepare their best strategy and mentality, so everything is difficult to guess. Arsenal and several non-Champion League title teams certainly cannot be underestimated, they will definitely give everything to prove it.
Each team can change their performance in a different season. Arsenal or other non favorite teams is possible to be stronger and give tough challenge. It depends on how their build their squad during the transfer season. The coach will also have a big role for the better or worse performance. The change of the coach may bring significant impact on the performance of the teams. Real Madrid and Inter Milan just changed their coach. Let's see how the new coaches to bring an impact on the team performance!