I understand your dilemna as your TKD training has engrained certain traits into your style. Because of that, your current MT training is going to feel awkward and (even worst) your current trainer is going to tell you that the things you've been told that you are doing correctly is now all wrong in this setting. Same thing when you start going back to your TKD training, the MT techniques are considered "wrong." The reality is that competitors in one or the other will not act the same as they are two completely different games.
But to answer a few questions directly:
In MT you want to avoid kicking with your foot because the style of blocking is different. If you take the point of an elbow or point of the knee to your foot (particularly your instep) while kicking, it will hurt or break. You can usually get away with using the instep in 2 instances: When you kick quickly (without committing to power) to the face/head and the inside of the leg. Kicks to the outside of the leg and to the body are usually defended by raising the leg and blocking with the shin, so kicking with the foot is a bad idea to those targets.
Now as far as your instructor telling you that you will "never" block a kick with your arm, well that isn't entirely true. To get an idea how you can defend against mid or high-line kicks you can take look at this thread here
. I get into the deeper "how to" later in the thread from post #10 onward. You can also pick up 2 easy to find books on the subject for easy reference: Savage Strikes by, Mark Hatmaker and Muay Thai Basics by, Christop Delp. This should help you on the way to better adjusting your game. You'll find that your TKD game may not be completely useless if you adapt it correctly.
Personally, find that a my current striking style is an amalgam of TKD, MT, Boxing and Kempo. When it comes to kicks, I usually find myself firing off rear-leg kicks MT style. Now my front-leg kicks are almost always thrown TKD style. Why? Simply put, that's what I find works for me. That's what I'm comfortable with. In your case, you just barely started MT so it is going to take a while to figure out which aspects work for you, let alone just getting used to things. I wouldn't throw everything you've been trained in out the window just yet.