Why does arXiv have a multi-day lag between submission and publication?
I guess the arXiv staff have to approve the article before is being published .... is my guessing correct?

Yes, arXiv moderates all submissions before posting them (there is some description of this here). This is not anywhere near as rigorous as peer review; rather, someone just flips through it to ensure that the submission is (1) not complete junk and (2) classified correctly. This approach is used by many pre-print platforms (SSRN, socarXiv, etc.).