This behavior in cats could be due to severe back pain or simply because they feel comfortable. Arching their backs is a way of trying to get their backs closer to their owner's hand, so the cat will happily arch its back slightly. Cats are quite adept at using body language to express their emotions.
Arching its body is a response to feeling its owner's love. Cats also express their affection by sniffing their owner's face, rubbing against their owner's body, and purring.
