Posing the arm
Next I want to pose the character to my preferred default position. There is nothing wrong with the current pose, I just prefer to rig a character with the arms elevated to a 45 degree angle or so with some slight flexion in the fingers. I find it easier to place and orient the joints. If you wish to leave the character with the arms at the side or maybe in more of a T-pose, by all means do so. Each default pose has its pros and cons so have an experiment. By elevating the arms, we can also test out how the mesh will deform at this very early stage and fix any big issues in topology, should they arise.
To change the pose of a mesh, I like to use a combination of joints, lattice deformers and Soft Selection when pushing the vertices around. The joints used will be created very roughly to fulfill the task of posing the character. Should we be making an actual rig to be used for animation, the creation of the joints would be handed with a lot more care. To pose the arm, I first duplicated the entire mesh and then hid the original model. I then deleted all the faces of the duplicated geometry other than the arm, the shoulder and part of the chest. Switch to the Animation menu (F2) and go Skeleton > Joint Tool. In the front view, create a couple of joints to act as the spine. Still in the front view, create a 5-joint chain going from the clavicle to the shoulder region, then to the elbow, the wrist and ending at the tip of the hand. Check the placement of the joints from all angles, making sure they sit at the pivotal points where the articulation will occur from. I simply translate the joints into place at this stage. Anatomically, my joint chain for the arm is not correct but I'm not too concerned about that. I just want enough bones in place to quickly pose the arm.
Correctly place the joints in the arm
Add a joint structure to aid in posing the arm
Select the root of the arm chain and parent it to the closest spine joint. Next, select the skeleton and the arm mesh and go Skin > Bind Skin > Smooth Bind (Options). Use the following settings: Bind To: Joint hierarchy. Bind Method: Closest distance. Skinning Method: Classic Linear. Normalize Weights: Interactive. Now rotate the arm into position and fix any problems areas using the Paint Skin Weight Tool, which you will find under Skin > Edit Smooth Skin. Once you have the arm posed, select the geometry and go Edit > Delete By Type > History. You can now delete the joint chain. Fix any problem areas by pushing the vertices around using Soft Selection and repeat the same procedure to relax the fingers slightly. It's worth having a play around with the Lattice deformer, which you will find under Create Deformers. This also aids in reposing or reshaping a mesh. The Lattice deformer is a bit like the Warp tool in Photoshop and again, when you are finished with it, select the mesh and delete the history on the model.
Editing the skin weights to pose the arm
Check for N-gons
Once the model has been posed, let's have a check for any N-gons or triangles we can tidy up. Switch to the Polygons menu (F3), select the geometry and go Mesh > Cleanup. When the Cleanup Options window appears, in the Cleanup Effect tab, set the Operation to Select Matching Polygons. Set the Fix by Tessellation to 4-sided faces and hit Apply. This will highlight all the quads on the model. Now go Edit > Invert Selection (Ctrl+Shift+I) to highlight all the triangles and N-gons. Now it's just a case of finding those troublesome polygons and doing some housework. I tend to rely on the Split Polygon tool at this stage to cut into the model where necessary. A bit of work later and the model is all in quads. To be honest, I don't mind a few triangles here and there. It's the N-gons that I will always avoid: they tend to give me issues during the skinning/enveloping process.
The Cleanup tool can be very helpful to highlight areas that will need tweaking