I don't see the distinction between taking a number of options and having a number of optional arguments. To me, this is exactly the same. A switch is an argument that is only checked for true/false, which means that in ordinary function calls you only really want to bother with it when passing 't.
It's true that passing a data structure can do most of the job of keyword arguments. Any searchable structure will do, really. Perhaps the simplest form from the call site's point of view is a property list. If Scheme's plist-get was implemented in Arc (trivial, but pg would probably pick a shorter name):
(def foo (a b c . rest)
(plist-get rest 'g))
arc> (foo 1 2 3 'g 42)
42
So, what do keyword arguments give you that tables/alists/plists do not?
1) better self documentation - the function signature tells what keys it understands
2) less code in the function body - you access the value like any other argument
3) a default form which is only evaluated if no value was given - without adding code to the function body
