xbee communication not established between arduino
Your example does not show your code that sends correctly but I will assume that it used 9600 speed and that the xbees are configured to 9600.

Not sure if this will help ...


  Arduino is connected to PC USB... RX>TX TX>RX 


1) In this case maybe you should ensure that xbee tx is connected to the correct rx pin on the Arduino? I know you have stated this above but with the basic xbee configuration, if data works one way then it should also work the opposite way.


  however, when I type something into the XCTU console, nothing appears on my Serial monitor and no light is seen on arduino


2) Your example doesn't show any code to send data to XCTU and the pin13 LED will only light up when an 'H' is sent from XCTU

You could try this for better diagnostics

    void loop() {
while(Serial.available() &gt; 0) {
           msg=(char) Serial.read();

      Serial.print("data arrived from xctu: ");
      Serial.print(msg);
      Serial.println();


           if(msg=='H') {
               digitalWrite(led,HIGH);
           }
           if(msg=='L') {
                digitalWrite(led,LOW);
           }
delay(1000);
}
}