At most up to a handbreadth uncovered?

P.S.: My daughters are also asking to clarify what exactly the difference is between exposed arms and a neckline opening at the chest in a shirt.
The question is not meant to provoke, Heaven forbid; we simply do not have a satisfying explanation as long as the only criterion is “what is customary.”

The question is based on a formal comparison and ignores the connotation and the context. It is like the claim that if men allow themselves to expose their chest in public, then that should be permitted for women too. The context and connotation are completely different. Now let us return to the question.
Exposure of a woman’s chest, even if only hinted at, has a sexual connotation. Exposure of the arm—much less so. But of course the accepted norm is a central criterion, even if not the only one. So I do not mean to say that total coverage is required.
There is no point looking for precise mathematical criteria here. Each person can sense for themselves what is reasonable and what is less so. It would be good to let them read the overview I sent you. It is very well written and very clear.

Which overview are you referring to?

This was discussed by email a long time ago. I no longer remember.

And what about the statement: “A handbreadth in a woman is nakedness”?

Same as above.

With God’s help, on the eve of the holy Sabbath, “and he changed his clothes,” 5783

The Mishnah Berurah in section 75 brings the words of the medieval authorities regarding dealing with the need to say holy matters in the presence of non-Jewish women who sing or uncover their arms and the like. The discussion permitting it is on the grounds of coercion, and the reasoning does not arise that custom changes the parameters of “nakedness.” After all, even a husband may not say holy matters in the presence of a handbreadth uncovered on his wife, even though he is accustomed to her.

With blessings for an illuminating Hanukkah and a peaceful Sabbath, Yaron Fishel Ordner

As noted above, here you are mistaken about the facts. That reasoning most certainly does appear among many halakhic decisors.
You can see a short overview here: https://ph.yhb.org.il/02-03-11/

With God’s help, 3 Tevet 5783

To the esteemed Rabbi Michael Abraham — greetings,

Thank you very much for referring me to Rabbi Eliezer Melamed’s words clarifying that even the later authorities who were lenient about saying holy matters in the presence of the hair of married women who do not cover it were not lenient regarding things that even unmarried women were not permitted to reveal. If so, habit does not permit short sleeves, which were not permitted for unmarried women either.

With blessings, may his light shine and heal, Y.P.O.R.