If somebody is arping for all the addresses on your broadcast domain, it will cause a denial of service, yes.

It will make your dhcp server mad, too.

Not much to do about that if you're not using managed switches. With managed switches, maybe you can spend an unreasonable amount of effort to try to prevent it, or you can just deal with it if it happens. Probably the 'right' way is to give each port its own broadcast domain and subnet, then it's pretty hard to mess up the other clients.