Confidence is essentially self-knowledge. Even if your abilities are comparatively slight in a particular area, accurate knowledge of those abilities will allow you to operate successfully within the limits of those abilities.
Arrogance is borne of an illusory belief in--as you say--one's own superiority. It is illusory because it always mistakes a part of the self for the whole: I am superior to everyone else because I am the best in my profession, or I am the richest, or the most sensitive--whatever the point of pride might be. However, this belief conceals from my view the myriad other facets of myself that are not so "superior." Even worse, it encourages me to flatten all life into the single dimension of "better/worse." Perhaps worst of all, it hides others from my view--except of course insofar as they help to feed my illusion.