Weeell, I've discovered ways to cancel Upperdash Arm lag completely. No, it's not as impressive as it sounds, since it only works on whiffs.
First, stand on the ledge. Roll away, and take another step. Upperdash for the ledge, and viola, you'll grab the ledge. I really can't think of a way to use it.
The next is an old one, but Onett and Lylat Cruise let you make great use of it. Upperdash off of a platform and land on another. Bam, canceled lag. On Onett you can use it for positioning or if you're not sure if the opponent will land somewhere.
And I can also confirm that Upperdash canceling on hit (to be referred to as "the holy grail" henceforth) still exists on the Wii U version. And you can grab an opponent who shielded your attack like this. Damn, somebody get to work on this.