Character Development true character
True Character is the substance inside, expressed through a character's choice in dilemma-how he or she behaviorally responds to either or both inner or outer conflict.
Character arc is the change in true character from beginning to the end of a story. The longer the story, such as in novels or movies, the greater room for believable arc there can be (in short fiction, it's enough that a character only somewhat alter insight or feelings, even if that change is easily imagined as being short-lived).
Characters arc, not "convert". It rings bogus if a main, or prominently featured character is so one-way through most of the story, then does an about-face for third act resolution. Saul of Tarsus's conversion may have worked in the New Testament, but such convenience is usually perceived as manipulation to make up for a lack of storytelling preparation.
The best arc is setup. And this is not necessarily that hard. It can be done by showing a spark of the arc in an early scene. In the movie Rocky, inherent in the story is the improbability of Rocky Balboa, being merely an inner city club fighter, lasting all twelve rounds with the world heavyweight champ. In his script, though, Sylvester Stallone established Rocky in the first scene as fiercely tenacious. Not a talented boxer, by any means, but one doggedly determined. Having this first impression, it was believable that his determination, combined with hard training, would enable Rocky to last with the great Apollo Creed. (Rocky in the sequel flicks was buffed-up to pugilistic perfection, made to last at the box office as well in the ring. Oh, well)