I have visited Arenal several times in the last few years (playing tourist guide for family) and I have never noticed any bad smells or anything funny with the water. I think that, for safety reasons and zoning restrictions, you won't be able to build or buy any home that is near enough to the cone for it to have any effect on the atmosphere. La Fortuna is the closest town to the volcano and that is several miles away from it. Nuevo Arenal and the area around Lake Arenal is I think actually the area where more developments are and where more people buy residences.
You can contact
Rico Realty for good information on the area and listings.