Originally Posted by stormyboy
Isn't the new wide-angle perspective filter in CS6 supposed to help with problems like this? I haven't tried it, but it might help the underlying problem.
You might be just thinking of lens corrections to change/correct the distortion. But to alter body shape etc. you really need to use something like the liquify tool mentioned above.
Personally I would shape the arm the way I want it, avoid/reconstruct/freeze the garment where it is problematic. Then to avoid objects and fabric behind the arm looking stretched/distorted I would do some cloning and healing (on a new layer, limited by a mask) to extend it into the new areas revealed by the thinner arm.