If your not getting ready for a contest there is no reason you should have to get rid of cheat days or meals. Enjoy life bro. Just dont cheat everyday or go over board but eat clean like oatmeal, beef, chicken, potatos/yams, rice (white or brown), etc. But you know your metabolism better than we do and you know what you can get away with so just play it by ear in a matter of speaking.
You can not do site fat loss, rather you lose fat overall. So while cutting down you will lower your overall bodyfat percentage. Since your arms have less fat on them you will notice that they will cut up faster than your stomach of course, and your stomach will come over time. Unfortunately you will find that your stomach will be one of the hardes spots to lose fat on so that may go last, it just takes consistancy in your diet, training and cardio. And yes you can take this drink while your trying to lean up.
What you are starting to see in the industry is more company's are now making higher molecular weight carb drinks such as Vitargo. This just shows it's potential to replenish glycogen at a much faster rate than dextrose or maltodextrin.
Here are a couple examples of new products besides Vitargo that use a high molecular weight carbohydrate:
Waximaize by IDS
Vextrago by PVL
Mutant Mass by PVL
Personally I take Mutant Mass (50 protein, 170 carbs) because it has a waxy barley/maize starch carb formula (Vextrago) right in it. I don't know of many other weight gainers that put heavy carbs in like that. I am not sure how easily it is to come by in the US but here in Canada the product is so cheap. Just over $70 for 15lb!
I think as time goes on, more companies will switch away from cheap maltodextrin or at least offer an alternative and slowly incorporate better carb formula's such as Mutant Mass.
I drink water during my workouts but only when I need it, so if I dont feel I need water I dont drink it. I sip on that drink and if I get thirsty I go the fountain.