1. You need to keep the history property node outside the loop (without the case structure and button) to clear the chart when the VI first starts running. Then you need to put another history property node inside a case structure controlled by the button inside the loop. Why does it need to be insdie the loop? Dataflow! The value of the button is only read when the part of the code containing the terminal is executed. In the VI you posted that read occurs immediately when the VI starts running and then never again until is has stopped and restarted. The only parts of the code which execute more than once are the parts inside the loop.
2. I am not familiar with the capabilities of the Arduino to determine if it can communicate and write to digital I/O lines fast enough to do what you want, but with clean, well designed code, I suspect it is possible. If you want to use a DAQ device from NI, you will need one with hardware timed digital outputs. Most of the low-end (and least expensive) boards do NOT have that capability. I think some of the X series devices sue hardware timed DIO, although not all all ports.
Lynn
