How many of the 1031 cars are available in arcade mode?

I haven't played GT5P so I don't know, but in GT4 a lot of them weren't

If by a lot, you mean 1, you're correct. Only the Auto Union V16 is unavailable in Arcade.
 
There are some cars unlocked at the beginning.. but as you buy more cars you can add them to your favorite and then use them in arcade mode.
 
There are some cars unlocked at the beginning.. but as you buy more cars you can add them to your favorite and then use them in arcade mode.

Well that's what I mean, how many are unlocked at the beginning
 
Wait...is the arcade garage the garage we use for 2 player mode?
 
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