The free arm simply means you can remove that little toolbox/table in front of the needle so you can slip a sleeve over the arm. Most new machines come with a free arm. Also, most new machines allow you to drop the feed dogs.
To find out if it has needle up/down, I would go to the brother sewing machine website and check out the model. You also really want to have infinitely adjustable stitch width and stitch length on a machine. I can't tell from the description if those 25 stitches are all pre-sets or if you can select one and then modify it by changing stitch width or length.
It looks on the lightweight side for quilting. I read the reviews in your link, and the third one mentions that it was a little difficult to sew fleece. If it doesn't handle fleece easily, it is probably going to bulk at a quilt sandwich for machine quilting.
In terms of price, this is at the very low end for a sewing machine. Some low-end machines are better than others. To find out how people like this particular model, go to
http://www.patternreviews.com . Select category "sm/serger" and then put in your model. Unfortunately, all of the many Brother models will come up but, if you are patient and scroll through the reviews, you are likely to find several for this model.
I personally would not rely on a machine like this for all my quilting needs. If I needed to look only at low-cost machines, my first choice would probably be Sears Kenmore machines because they tend to deliver more bang for the buck.