"Arching the back" means what it says, and is what you described as "middle part highest". It always leads to hyperextension, which in body use terms puts pressure on the lumbar discs, and in swimming terms unbalances you and creates drag.
Its opposite is usually referred to as "flattening the back", which (unless taken too literally, which will cause other problems) will correct the common tendency to exaggerate the natural lumbar curve. What it really means is maintaining the lumbar spine in its neutral position, and it's achieved by correct use of the core stabilising muscles, principally the transversus abdominis and pelvic floor.
This is what you see Ryan Lochte doing. His technique is perfect, thanks among other things to his balanced, streamlined body.