Short circuit detector (autoreverser circuit) using current sensor and switching relay
Will this circuit work?


Do you have any reason to doubt the simulation? Looks fine to me.


  Is the acs712 sensor a good replacement?


Sure. The bandwidth is adequate. You just need to pick the correct sensitivity range for your application. (5A, 20A, 30A)


  What are the suitable DIP components?


We don't do product recommendations here. But your favorite distributor's website (Digi-Key, Mouser, etc.) will be able to help you there.


  Can I "catch" the output from the 555 with an Arduino and switch the relay?


Sure, no problem.


  I have and other thoughts like set the comparator's limits with a potentiometer or from Arduino.


Also no problem.

But if you're going to throw a microcontroller in there anyway, you can simplify the circuit considerably, eliminating the comparators, the 555 and the DFF. Just digitize the output of the current sensor directly (ADC with an adequate sample rate), do all of the logic in firmware, and switch the relay driver as needed.