I made a Rhino model which will serve as the basis for the rest of my design. I am currently planning on having three motors controlling the pen (shown as light blue boxes), two of which will stay at the far end of the machine. The third motor will need to move back and forth on the threaded screw to allow the pen to move back and forth.
I had originally imagined on putting your arm down a tube, but having the machine rest on a table seemed like it would be a little bit more practical. I was never intending on giving the pen the ability to move a full 360 degrees around the arm, but with the new design I am pretty much stuck with just 180 degrees of movement.
On the technical side I will be 3d printing my own thread (found on Thingiverse) for the threaded rod and running a steel rod through it for support. I plan on having a plywood base and back that I may or may not paint depending on the look I want to give it. I need to buy a stepper motor and the AdaFruit Motor Shield, and hopefully that will work well with the two servo motors I already own.