Does diabetes cause severe arm and hand pain?

Yes but . . .: Poorly controlled diabetes can lead to nerve damage than can result in peripheral (diabetic) neuropathy which is often described as burning, numb, tingling, icy cold pain. But diabetes also increases risk for heart disease, even (silent) heart attacks which can sometimes present as heartburn with arm pain. If you're having shortness of breath, sweating, heartburn w/arm & hand pain, call 911 now.

Indirectly: Diabetes is a leading cause for peripheral neuropathy and compressive neuropathies like carpal tunnel syndrome. I would recommend an evaluation by a health care professional.