Welcome to LQ.
I haven't used Arch, so I'm not certain that i can help, but here goes.
If I understand correctly, Arch by default is a text by default distro, and if you want GUI, you need to install it (KDE, gnome, etc). That being said, it's possible that the Arch default boot level is to text-only.
The blinking cursor is probably waiting for you to login. The file you may need to edit is /etc/inittab, and you will need root authority to edit the file. So, at the blinking cursor, type root and press enter. You should be prompted for a password: enter the root password you set up during installation. From this point on, be very careful what you do. With root authority you can trash you system in a heartbeat.
If your login was successful, type vim /etc/inittab. That will open file /etc/inittab in the vim editor. Use the arrow keys to move up/down and left/right in the file.
Look for something like this:
# The default runlevel.
where the X is a number (probably 1). Use the arrow keys to move the cursor down and across to that number and press the x key to delete the number.
Then press i to enter insert mode and enter the number 5 (for multi-user graphic mode) in the same space (be careful that the number is between the two : : colons.
Then press the escape key to exit insert mode, followed by :wq (colon w q) to quit vim and save the change.
From that point on, boot should take you to the GUI login for KDE.
In the mean time, to get to KDE without reboot, at the blinking cursor, type startx or startkde and press enter to get to the KDE login screen.
I hope these instructions work for you.