Your argument doesn't apply to a world of scarcity. There is huge
variety of products, all of which are currently being produced, of
which additional quantities could be used by someone for some purpose.
There is no problem coming up with goods and services that people
could use. We know this because they have prices greater than zero.
You imagine a world in which we have trouble thinking of things for people to do. A world without scarcity.
Not quite right: The scarce good would then be new ideas. But we can easily rephrase Woolsey's basic point: Since the price of goods created using old ideas remains positive, people could just produce familiar goods until some better ideas come along.
Of course, this all applies to an economy with scarcity. You know,
the one economists study. It doesn't apply to your world where people
want to produce, presumably to earn incomes, but not because there is
anything they want to buy.
Arnold could still insist that in our current situation, finding new ideas is especially important. But I think that Woolsey would correctly reply that producing more familiar goods is better than sitting on unemployed resources for years.