If it was settled law, why the controversy over the eligibility of Chester A. Arthur?
First, you don't understand what the controversy about Chester A. Arthur's eligibility was about. He was born in VT to an American citizen mother and a father who was not a US citizen. His father got naturalized after Arthur was born. He was a citizen at birth because he was born on American soil. He was not naturalized. Those who claimed that he was not a natural born citizen under the Constitution as required to be President or VP. The changes in the law had nothing to do with Arthur's citizenship. He was a citizen at birth.
Second, you are confusing citizenship as it applies to those born abroad with the still to be defined requirement of a natural born citizen and eligibility to be President. Here are the current rules/laws that govern it
The change in the laws that pertained to the fact that Obama was not eligible if he were born abroad, even to an American citizen mother. Specifically,
Birth Abroad to One Citizen and One Alien Parent in Wedlock A child born abroad to one U.S. citizen parent and one alien parent acquires U.S. citizenship at birth under Section 301(g) of the INA provided the U.S. citizen parent was physically present in the United States or one of its outlying possessions for the time period required by the law applicable at the time of the child's birth. (For birth on or after November 14, 1986, a period of five years physical presence, two after the age of fourteen, is required. For birth between December 24, 1952 and November 13, 1986, a period of ten years, five after the age of fourteen, is required for physical presence in the United States or one of its outlying possessions to transmit U.S. citizenship to the child.) The U.S. citizen parent must be the genetic or the gestational parent and the legal parent of the child under local law at the time and place of the child’s birth to transmit U.S. citizenship.
Obama's mother was 17 at the time of his birth in 1961. If Obama had been born overseas, his mother could not transmit citizenship at birth to him.
There are two ways to become a citizen, i.e., at birth and naturalization. There are two ways to obtain citizenship at birth, i.e., jus solis by being born on US soil, including US territories and jus sangunis, by blood.
Cruz obtained his citizenship via jus sanguinis, which is DERIVATIVE citizenship. Cruz's mother applied for his citizenship (assuming this was done in Canada at the time of his birth or during the four years he lived in Canada. In order to determine his eligibility, his mother had to prove her citizenship in order to transmit it to him. Taking no action would leave Cruz as solely a Canadian citizen. Cruz obtained his Canadian citizenship thru birthright citizenship, jus solis. Cruz was a Canadian before he was an American citizen.
Again, the definition of natural born citizen as it applies to eligibility for the Presidency has never been defined by the courts.
At the time of the McCain Senate resolution, the following article appeared in the WP: McCain's Birth Abroad Stirs Legal Debate
The Senate has unanimously declared John McCain a natural-born citizen, eligible to be president of the United States.
That is the good news for the presumptive Republican nominee, who was born nearly 72 years ago in a military hospital in the Panama Canal Zone, then under U.S. jurisdiction. The bad news is that the nonbinding Senate resolution passed Wednesday night is simply an opinion that has little bearing on an arcane constitutional debate that has preoccupied legal scholars for many weeks.
Article II of the Constitution states that "no person except a natural born citizen . . . shall be eligible to the office of president." The problem is that the Founding Fathers never defined exactly what they meant by "natural born citizen," and the matter has never been fully tested in court. At least three pending cases are challenging McCain's right to be sworn in as president.
Jurists on both sides of the political divide, consulted by the McCain campaign, insist that the issue is clear-cut. They argue that McCain is a natural-born citizen because the United States held sovereignty over the Panama Canal Zone at the time of his birth, on Aug. 29, 1936; because he was born on a U.S. military base; and because his parents were U.S. citizens.
But Sarah H. Duggin, an associate law professor at Catholic University who has studied the "natural born" issue in detail, said the question is "not so simple." While she said McCain would probably prevail in a determined legal challenge to his eligibility to be president, she added that the matter can be fully resolved only by a constitutional amendment or a Supreme Court decision.
"The Constitution is ambiguous," Duggin said. "The McCain side has some really good arguments, but ultimately there has never been any real resolution of this issue. Congress cannot legislatively change the meaning of the Constitution."
Senators sympathetic to McCain's position, including Democrats Claire McCaskill (Mo.) and Patrick J. Leahy (Vt.), dropped an earlier attempt to quell the eligibility controversy with legislation. McCaskill acknowledged in an interview that there is "no way" to completely resolve the question short of a constitutional amendment, a cumbersome process which could not be concluded before November.
She described the nonbinding resolution, which she sponsored, as "the quickest, clearest and most efficient" way for the Senate to send a message to the courts that McCain has the right to be president.
The law has been changes but not the Constitution which is the whole point.