I'll check. I unlocked it the hard way, but on my second save I worked out a better way. Two words: rally car. It places you to race class a cars so it's a walk in the park. If you win any rally event in sim mode, use that car in arcade to mash the competition.
area F and e in arcade changes depending on what race you choose.
Single race (pro mode doesn't change lineup) has these tracks:
ssr11, deep forest II, ssr5 II, seattle ii, cote d'azur, ssr5 wet, apricot hill ii, ssr11 ii, tahiti maze ii, ssr5 wet ii
free run adds complex string and complex st. ii
2 player locks out cote d'azur but retains complex st and reverse version.
single race dry tarmac races have 5 opponents, wet races have 3 and dirt has 1.
easy level: 2 laps
normal : 3 laps
hard: 5 or 4 for rally
pro: 10 with wear, or 5 no wear for rally
in options you can choose from 1 to 99 laps, toggle tyre damage, adjust handicap, and adjust slow car boost for 2p battles.
hope this info helps!
a lot of this is from GTPedia.