My Legacy 91 idles rough. Changed plugs,wires,O2 sensor,filters. I was looking at the engine in the dark to see if any plug wires were arcing. I noticed a lot of arcing inside where the ignition coils are located on the top of the engine, where the plug wires attach to. Now this is a distributorless system, uses electronic ignition and 2 coils. Is it normal to see any arcing inside there?

I don't believe that would be normal. I may be wrong though, but logically, the arching is putting current into other cylinders and messing up the firing order, causing the rough idle. I'd replace the coils.