I don't have much experience with heating elements specifically, but hers what I found;
This type of heating element is called Calrod (a trademarked name). Here's a cross section :
As you can see, there's stuff inside the visible tube. The spiral inside is the actual "wire", through which current flows, and that heats up (see also: Joule's Law).
Then there's a layer of magnesium oxyde, which is an insulator. This is what keeps the current from going away from the wires.
The outside sheath that you see is just some stainless steel tubing that keeps the (powdery) magnesium oxyde in.
why is there no arcing?
On the topic of arcing; an arc is a very specific phenomenon. Usually, air is an insulator. However, under very high voltage, current can start to cross air gaps. In doing so, it heats up the air a lot, creating a plasma. This plasma conducts electricity (at least it can do so better than plain air), so once the air is "broken", current can flow through the air gap. I don't know the exact numbers, and it depends on the gap size, but an arc requires at least a few kilovolts to appear.
Sidenote: when you get a zap when touching something metallic after you've worn slippers, that's because you've actually gained a few kilovolts of charge compared to the metallic thing, and you've made a (very short lived) arc!
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