In the transcendental world there is no influence of maya or time. So there is full freedom of activities but because there is no maya, therefore everyone is engaged in his natural activities or spontaneously serving Krishna in different relationships. Just like hand is related with the whole body for some particular purpose, the leg is related with the whole body for some particular purpose, the ear is related with the whole body for some particular purpose, and so on. Similarly all living entities being eternally part and parcel of the Supreme Lord they are engaged in His service for some particular purpose. So there are varieties of engagements but they are all united with the central Figure, Lord Krishna. So this is in answer to your question; "On Krishna loka are all of Krishna's pastimes with the living entities controlled by Krishna, or do the living entities have choice in this matter? In other words, is one's rasa governed by strict laws determined by Krishna or is there free choice aside from the free choice of choosing Krishna or maya?"
Your second question, "Why did Arjuna ask Krishna to go to His four armed form rather than His two armed form after Krishna had showed Arjuna His Visvarupa?" Because he understood that Krishna is the original Narayana. After seeing His Visvarupa, Arjuna was accustomed to see Krishna with two hands, but when he saw the Visvarupa, he understood Him the Supreme Personality of Godhead, and as such, he requested Him to revert to the original Form of Narayana. Then, Krishna after showing him the Narayana form, again to revert to His original Krishna form. Krishna explained that Narayana form is not original, but Krishna form in two hands is the original and even the demigods desire to see this form.