Can't help with the dotted line. The big arrow always points to the next waypoint. If you're following a track which is a series of waypoints close together and if you're riding along a road, it will generally point in the direction you're going.
I have a Legend HCx and used it on a recent circular Audax. I plotted the route on bikehike by hand clicking around the course, not using the "follow road" option, putting a waypoint at each change of direction - eg turn left, fork right, straight on at crossroads etc. Labelled each waypoint accordingly, then uploaded to GPS.
As I was riding along, the big arrow was pointing towards the next waypoint, which could have been 100m away, or 5km away - it doesn't matter. The big arrow, (which, important for me, I can see without my specs) always pointed to the next change of direction, and the GPS gave an audible bleep as I approached the waypoint. It worked really well. I am terrible at navigating, with the Etrex I got round the course and hardly got lost at all!
Try it on a walking course around the block. The Etrex is not intuitive - if I had used the instructions only I would never have learned how to use it. This forum, and excellent tips from others exp. Frankly Franky are the way to go.