I might just be being a little dumb but with the top i'm currently wearing, you have to remove limbs to wear it properly (unless you want four arms, of course).

However, even though the base layer is underneath the background i'm using, there's still empty white space where the arms would normally be. Is there a way to fix this or is it just going to be like that?

That's because some backgrounds have "cutouts" - white space where the avatar is. These are older backgrounds that worked that way in the older wardrobe system. They may be updated someday, but don't count on it.

Choices: use a new background that doesn't have this gap, or "fill-in" the empty space.

In the example below, the first outfit has the "erased" limbs. In the second I use another snowy background behind the background I want to use to sort of obscure the missing limbs.

by Lypsyl by Lypsyl

ooh i didn't think of the filling using another item idea thank you for answering my question!!