Just becuase plainshift, is set during medeival times, doesnt mean it supposed to be anything like real life, so what justifies, the arena being anything like the real colloseium? Why not have it have habitats, if your right, and you 'havent' seen an arena with habitat, then that makes planeshift even more unique.
If you want to hunt animals go to the wilderness, not to the Arena in Hydlaa. Its not for hunting its so that people don't have to be distracted by trees or bushes being in the way to watch a fight. Sorry but I don't really think the habitat idea would work to greatly in the Arena.
Although to add onto the idea, if you do want it to be a little more unique, re-building the arena is a future project, a possibility that the arena is split into many different sectors, such as an area for archers, and fighters to train in (not against beasts) and then having an area for both Archers, Magicians and fighters to use like an area where the monster is in their habitat, a place not for watching but for practicing, so that archers or magicians can climb trees (use of portals obviously). But the monsters will probably automatically attack the person, instead of the player starting the attack. Then there will be public hall ways, with shops and no monsters, its to be safe for young children and weak people. Then theres the major area for hard monsters a place that citizens can watch from above, where the monsters are hard enough that it may need to be a group battle with archers and fighters. The actually Hydlaa Arena, a possibility that you can fight another player type NPC, thats to be done to the long future.