The one additional thing I need to do is encrypting the filesystem, in case I lose it. And this is where I get lost a bit

I've never really fiddled with the dm-crypt/LVM directly, it was mostly setup by the distribution installer. Most of the HOWTOs either explain it how to do that on x86 (with grub, etc.) which apparently does not work with ARM. Is there any good HOWTO explaining how to do this with Arch on ARM?
In the worst case I can live with unencrypted root, and mounting an encrypted /home after a boot, but that's another issue I'm running into - I can create LUKS volume using cryptsetup, but when I try opening it I get an error that the key is invalid. The only cipher that works seems to be 'aes'. I guess this related to the ciphers compiled into the chromeos kernel, although I don't understand why creating the volume does not fail.
I've been thinking about compiling a custom kernel, but apparently Arch is already on gcc 5.x, and compiling kernel with that does not work yet. But I guess I can compile the kernel in some other distribution using crouton.