‘best” depends on what you hope to accomplish.  If use an amp for the front in wall speakers, you’ll have good stereo separation when listening to music, but for TV audio, you’ll be limited to 5.1 dolby with a phantom center channel and no atmos audio.  The Arc won’t be as good (though not bad, IMO) stereo separation, but will give you atmos audio, including atmos music.

So it depends on what you want.  if you listen to music 90% of the time, and don’t care about atmos, then the amp front speakers is a good choice.  if you watch movies most of the time, then go with the Arc.

Main purpose of this setup is movies.  Will I achieve Atmos with just the Arc? Don’t I need rear Atmos speakers to complete it?

You can still play Dolby Atmos audio with just the Arc, but adding a pair of surround speakers will definitely give you a more immersive experience.