Arms are turned on/off in settings, general (I think). The colour of the gloves depends on what car you're in, I think the guy sitting in a lotus wears lotus gloves for example.
The file is named incorrectly. It should be DRIVER_GLOVES_GREY for modern driver
DRIVER_70-80_GLOVES_WHITE for 70's drivers
DRIVER_GLOVES_67 for 60's drivers.