Who to 5*

This should be an easy choice.
I would say Xander is the best unit to upgrade especially if you have horse emblem.
He is one of the best red cav units around (up to now) and upgrading him to 5* gives him his exclusive weapon.

Focus on the units that are in the normal summoning so you can +10 them. either go for hana or sothe.
but personally go for Hana cause she is easier to +10 than sothe since hana can be obtained as a 3* or *4 stars.

Sothe would be my personal choice (I plan to make a +10 Sothe when I have enough copies), but the GHB units are all good choices for 2 reasons - 1) there’s part of the arena rotation meaning you’ll have more options in arena for a bonus unit, 2) the first 3 are top quality units that will be benefitial in any team.

You should do Hana if you are serious about high Tier Arena since she is easily accessible in the 3- and 4-Star summoning pool. It will take a while to reach +10, but she is a solid F2P option.

If you haven't foddered off or just have all available copies of Michalis, you can make him a 5-Star Lv. 40+5 (I think that is the max you can get him), and he should score pretty well in Arena, but that will be a while off and you can't +10 him until IS decides to give out more copies.

Otherwise, Xander is amazing for both in-game and Arena if you build him well and/or run him in Horse Emblem. A warning is that he won't score too high for Arena even with merges, but you can still run him in Arena Assault. The above doesn't really matter though if you just want good 5-Stars to clear most content with.