Allah is indeed above his Arsh and separate from His creation- all the evidence points to this. We don’t say Allah is a body or anything- we just affirm what He and His Messenger (sallallahu aleyhi wasallam) affirmed. This is in opposition to Abu Aristotle
If you mean by "above the ˆArsh" in the sense of greatness of status or the like, then this is true, and all Muslims must believe that. This is the most beautiful meaning one can understand from this statement, and is therefore how it should be understood, because Aļļaah has the most beautiful namings.
However, it is not true that evidence shows that Aļļaah is above the Arsh in the sense of location and direction, because Aļļaah told us that He does not resemble anything, and because it is not the most beautiful meaning of the statement.
If He was in a place, then He would have a limit adjacent to the ˆArsh, and this limit would be of some shape. Such a shape would need to be specified and brought into existence, i.e. created by a creator, just like all other shapes, which means that Aļļaah would be in need of a creator, and that would mean that He is like creation. That is why the Salaf said that Aļļaah is without a how, that is, without a shape. This is actually very obvious. See also what Al-Qurţubiyy said in this regard at this link, and see Wahabi contention: Maalik says Aļļaah has a how.
As for your, "We don’t say Allah is a body or anything…." this misses the point. It is not about the words you use. If you say that Aļļaah is in a place/location over the Arsh, then you are saying that He is a body, because being in a location necessitates borders for the thing in that place. This is because something in a location is either in all locations, or in some location(s). If it is in some location, but not others, it must be confined by a border and have a size and shape limiting it to that location i.e. it must be a body. That is why it makes no sense to say that Aļļaah is in a place, but is not a body. We do not care about the word body, as much as we care about its meaning. Or put in another way, we care about the word body, because of its meaning. For more detail see this article: Bodies have limits, but not Aļļaah .