I would recommend that you do not use the sub-d in your DAZ exports. It is adding a rediculous amount of extra polys. If you want to make sure the mesh appears smooth, check the box in the iClone modify panel for "Realtime Smooth". It does the same thing sub-d does, but iClone friendly.
To take care of the arms being rotated inside the body, raise them up in 3DXchange so that the character is in a Y-pose instead of a T-pose. For a quick workaround, and to help understand the problem, you can rotate the arms up in iClone using the Edit Motion Layer rotate gizmo.