Here's a shot of a old Westinghouse enclosed arc lamp with the cover opened showing the control gear inside. Note that the glass globe around the carbon rods is missing.
Interesting, but they kind of ruined the fixture by cutting the original housing... Well, it's cool to see how it is made inside. Do you have a closer shot?
Sadly no, This is the only picture I have of the fixture, If I'm in that area again I'll see if I can get a close up picture of it. I recall that the original housing wasn't cut though, I think they just opened up the ballast door on it.
No, it was electricity arcing between the two carbon rods, that creates light. The carbon rods wear away so they need to be adjusted and eventually replaced. See this video.