The amount of widespread misconceptions out there about how the Arena works keeps baffling me. Between the visual bug that makes Traits appear despite actually being disabled (as intended), the fact that the Console port’s version is so different from the original game’s, it’s basically another mode altogether, and a few players who haven’t played the Arena in ages but are so used to talk as if they were an authority on any subject that they spread incorrect info regularly… I guess it’s tough for someone starting out on this game mode to find reliable info beforehand.
We might actually need a proper in-game tutorial for this mode, so that newcomers don’t have a horrible first experience with it, and don’t write the Arena off as a result.
@Theicla Based on your OP, draft, comments, and questions, it’s clear that you haven’t played a single Arena run (at least in a long while?), and that you want to give it (another?) shot. I want you to enjoy this fantastic game mode, and start playing it regularly (again?). The Arena pool isn’t super healthy these days, and we do need you to join us, along with as many other players as possible. I’m tired of facing the same few guys twice or more per run! So I really want to help you get (back?) on track, here. =)
First of all, there’s at least one amazing Guide out there for Arena Beginners; it was last updated 3 patches ago, but it stays very relevant to the current meta at its core. I recommend it highly:
Second of all, you were already given solid answers in this thread, spread across posts by @RiverSong, @Ashasekayi and @Zelfore. Let me recap, and add a few other key things you also need to know:
— Kingdom, Team, Color, and Hero Class Bonuses (and Perks) ARE OFF in the Arena
— Traits ARE OFF in the Arena
— Troops ARE ALL AT LEVEL 15 in the Arena (and yes, these are Level 15 stats, not 10)
+
— WYSIWYG - What You See Is What You Get (for the most part): the state of your own collection doesn’t matter, except for your choice of Weapons, which is limited to the ones you do own.
— Your HERO LEVEL matters; that’s the exception. If you’re a Level 500 player, you’ll enjoy your 8 Attack and your 5 Magic. If you’re, say Level 300, you’ll only have 4 Magic (and I believe 7 Attack), and so on.
— Your MASTERY Levels ARE ON. If you’re in a crowded, broken “top” Guild and/or a high level player, you’ll get twice or even thrice as many Mana Surges per game on average as most of your opponents.
— STUN does NOTHING in the Arena (because Traits don’t exist there). Keep away from it!
Last but not least, let me offer you constructive feedback on your draft and how you can salvage this particular Arena run.
It isn’t (see above). What it is is a poorly balanced draft, as you’re missing out on 3 colors out of 6 from your troops. This is terrible in Arena. You can still do okay if you pick the lazy man’s weapon of choice (if you have it): the utterly broken Imperial Jewel (and for the love of GoW, please do put your Hero at the bottom, in that case! ^^). Prismatic Orb could work decently here as well, especially since you picked squishy, squishy troops (Sabertooth is midranged, but the other two will die quickly to any strong lineup these days).
So, you now know that none of those things apply. As a result, and I think it’s crucial to emphasize that even further, the answer to your second question above is IT DOESN’T.
The game didn’t “provide an all-green selection”, you drafted yourself in that corner. Well, once in a blue moon, you might get really difficult choices and even end up missing out on one, possibly two colors at most. Missing out on 3 colors is the result of imbalanced drafting, not selections (of course, you were under the impression that bonuses would work, so it’s understandable in this case).
In a normal Arena draft, once you’ve picked a Color X Common, you should really, really only pick a Color X Rare if the other two choices are utter garbage and/or the one you pick is brokenly OP. Under no circumstances is it ever okay to also pick Color X for your Ultra-Rare, though.
I don’t know what the alternatives were in this draft, but the picks you’ve made range from just decent (Reaver), to average (Sabertooth), to slightly above average (Wyvern), and they also don’t work too well as a team (beyond the fact that they’re all starving for the same mana color): you’re lacking a tank, the DPS isn’t great, and you don’t need all that Attack throughout the line-up. So I’m sure in retrospect, knowing what you know now about how the Arena works, you could have made a much better draft than that with the selections on offer.
I hope you still have a fun experience, and look forward to facing your next (hopefully much stronger) line-up in the Arena! 
Oh boy, does the Console version of the Arena sound like an utterly unplayable mess… I already heard that Traits apply there, and that you have to draft your Weapon, but I would never have imagined it would also be your first pick. This adds insult to injury, as it not only limits your options, it completely negates the normal role of that pick: to smooth out and round up your team… Well, here’s hoping they’ll eventually get rid of all this nonsense and give you Console players the real deal. =)