There are different ways to attack this, boils down to preference I guess. Personally I try to keep as much of the original arch as possible rather than replace the whole thing and butt weld with a gap, only thing is you can only do this by welding small bits at a time, literally just a load of tack welds, if you try to weld too much in one go it distorts like crazy so do a tack then move somewhere else while it cools, eventually you will fill all the gaps in.
Also when you get a new arch they are quite wide, the wider you leave it ( in the direction of the arrow in pic below) it the harder it is to blend in to the body work so again replace as small a bit as you can.
I recently read an old Practical Classics article about replacing arches and it suggested leaving the new arch big and 'tucking' it under where it joins the body work. I haven't tried this but I can see how it would make it better to weld as you have extra metal to weld to. The only problem I could see is that you could end up with a water trap on the inside of your arch.
The other thing to bear in mind is if you have to repair the inner arch as well, this may dictate how much of the outer arch you have to remove for access. I always cut out the rot from both inner and outer arch, repair the outer arch first, then the inner one, but I see others do the inner arch first then the outer, again down to preference I guess.
Anyway, hope this made sense!