You've got three choices to go about light sparring. (1) Use less speed and explosiveness but proper technique, (2) Turning off some of the mechanical generators of power (hips / shoulders) but keeping the speed there, (3) using a combination of the two previous where sometimes you throw fast without all the power transfer from the mechanical generators and sometimes you throw slower but with all the mechanical pieces in place.
My preference is to use a combination of both. I often will throw using good technique (meaning mechanically correct) but stay completely relaxed when I throw--not tensing at the last part of the movement as I normally would. For example when I kick, kick with a "dead" lead. The leg will feel heavy to my partner when it connects, but it won't be explosive enough to hurt my partner. Within all that I'll throw in fast techniques that offer no mechanical backup (or as you say "arm punches"). It's not that the technique isn't there, it's that the technique isn't as pronounced...meaning I won't be turning the hips as much or putting as much hip and shoulder into it.
Just remember that "speed kills". It's an important component to explosiveness and power generation. When combined with good technique...you'll have great effectiveness. So when you light spar in general, either turn off some of the power generators (like the hips and/or shoulder), or you slow down the speed or perhaps a little of both.
Also, disregard anyone that says you need to spar hard all the time or even most of the time. As a fighter, that's not how it's done at most Thai gyms and not how you should go about it if you want to gain skill in an efficient and safe manner. You don't beat down your body in training and then go fight--that's not logical.
You DO need to make sure that you're going 75%+ intensity every so often though to keep things honest and find holes in your game. Light sparring is where you will gain insight into distance, timing, footwork, and everything else you'll be using in real fights, the difference being only in the pace at times and the amount of power you're being hit with. So the heavy sparring is meant to make sure that your "defense" is truly going to keep you safe and to familiarize your body with the resiliency it will need when someone is trying to hit you fast and hard.