Hi OP
I understand how exhausted and worn down you are. But I fear you are getting some really bad advice on this thread. I read your post yesterday and didn't reply but it's been on my mind all day, so here goes.
In my opinion, there is a strong majority view on Mumsnet that is pro-cosleeping, and many posters feel really strongly about it and will defend it passionately. I fear that this has clouded their views and, based on my reading of the replies, I think many posters are offering advice and experience that does not take account of the very important information in your post. They are comparing nestling/stretching your arm out on the mattress above the level of the baby's head, with what you are doing - using your arm as a pillow for the baby.
I'm really sorry to say this bluntly but what you are doing is simply not safe. A baby this young, with extremely limited mobility and head control, needs to be laid flat. Propping up the head like this can pose a risk to the airway. This risk is increased by the fact that you are propping up the head on your arm, and you cannot exclude that you will move, twitch, shrug, or adjust your arm in some way while sleeping that may increase the angle of the baby's neck or cause the baby to roll into an unsafe position.
Similarly, your previous method of the baby lying on your chest unfortunately isn't safe either.
No amount of exclusive breastfeeding, anecdotes about the Japanese, or references to cave women will change that. We know that the safest sleep position for a baby is on a flat surface. I am afraid that I would not take any comfort from the experiences of earlier posters.
If I were you, I'd look at a feeding option (pumping or formula) that could mean you could take the nights in turns with your partner or another adult. I'd also try options like slightly elevating the cot mattress in case reflux is the issue, and introducing a soother. You could look up sleep cycles and ensure enough time has passed for your baby to get into a deep sleep before withdrawing your arm. I'd also ask your health visitor or GP for support and other advice.
I feel awful typing this because I know how desperate sleep deprivation is. But allowing you gain false reassurance about a dangerous situation is not going to help. I really feel for you; I do.