First of all, it sounds like you actually made the level in arena made, BUT your preferences were set for single player. Though you made it on the "RED" blocked screen and then EVEN IF YOU DID IT LATER changed it to multiplayer, it still made an EXE that didnt seem to be MP.
First of all, I have some questions,
1)Did your title screen FIRST ask for you to make up a display name?
2)Did it contain options to host?
3)...well basically combine the first two.
Answering those three questi0ons first will help ALL help you. Or maybe just me. From the get GO. YOU HAVE TO BEGIN AND THEN SAVE YOUR GAME AS A MULTIPLAYER PREFERRED GAME THAT IS IN ARENA MODE. otherwiuse, though you did it later, nothing will help.
*Experience my friend.
The best advice to help you with your peoblem is to redo the level or LEVELS (which will sucxxorz.....but we had to do it at first.)
so I guess to answer you fully, FIRST evaluate whether or not the existin project is worth redooing or not. Then proceed from there.
Sometimes it is better to have put yourself out there to get beat down, than to pee your pants wondering why you never got in fights as a child when "the time" comes.