I think that the question has a few false premises. The arXiv is not necessarily the best source for "understanding the latest research".

First, there is room to argue that in mathematics the "latest" research is not necessarily the best place to start. In my experience, really delving into the founding papers on a subject has been much more important as a first step. Only later, when a researcher is familiar with the big picture, is it a good idea to find the latest work in the field.

Second, the arXiv is a very small amount of recent research. It might be more helpful (depending on your field) to sign up for emails from the top journals, and review the titles of the new papers published every month.

Third, again in my experience, it is very rare for somebody to be working on exactly the same thing I'm working on. The arXiv (or any journal, or conference) can be a good place to get a new problem to work on, but the chance that somebody is going to publish on the arXiv something directly related to what you are working on is going to be very small, unless you are taking a long time to do that research, you took your problem from an active research program of someone else, or a lot of people are thinking about the same thing because it is a famous problem.