Yes, your arugula's crop season is coming to an end, as bstpierre notes. Mine finished going to seed and dried out completely by last week (I live in southern California, so you can compare the weather here with your location).
You certainly have planted them very close to each other, which is why they aren't tall/the leaves aren't bigger (in comparison, mine's about 3-4 feet tall). Next year, try to give them some more space (depending on how much you can spare), ideally about 10 inches apart. The plants will support each other as they grow, just like some varieties of peas. I don't try to collect the seeds, but instead let the pods dry out, pop and spread it on its own. When it grows again the next season, you can pull them from wherever they are and plant it neatly in a row/grid.
One thing that I did notice that was different from other greens in my garden, is that the leaves of arugula still remained edible right till the very end and do not increase in bitterness like lettuce does. The reason for this is that in lettuce, the bitterness is a defense mechanism against pests, especially during the final bolting phase. On the other hand, arugula is inherently bitter and most insects avoid it, so there is no need for an additional defense mechanism. Since arugula is an acquired taste anyway, there is no discernable change in bitterness. So for now, the green leaves are perfectly fine to eat.