Why should a diode be placed parallel to the coil?
Yes, it is there to "bleed off" large reverse voltages (back EMF) generated by the magnetic field in the coil as it collapses.


  Why would this be the case? If the diode is there to circumvent large voltage flow back, wouldn't this skip pass the diode and go straight to the arduino?


Why would it want to do that, when there is a nice short low-resistance path right there through the diode?  If you want to pop next door to borrow some sugar, do you just open your door, walk a few feet, and knock on their door, or do you get the car out, drive to the next town and back, park the car, get out, and knock on your neighbour's door?  Current is just as lazy as you or I - it takes the shortest, easiest, route.