A bit late to the party here, but an arrest and conviction are two very different things. I’ve known a few pilots in my time who have actual convictions (theft, DUI, etc.) and they’re still employed after having served the requisite sentence. If you were only arrested, then you can confidently answer “no” to the question. If the company requires a security clearance, you could be upfront, but honestly it’s none of their business without a conviction.
In many cases, the criminal conviction question is used only to narrow the candidate pool; That’s how some of my previous companies used the question.
In other cases, it’s because the company flies clients with specific requests or otherwise requires security clearances. For example, a corporate gig may require a background check because the client owns a company that has government contracts. That security clearance may require a certain number of “clean” years.