Enjoyable and informative posts. I'd like to add my two cents into this discussion. I've been arranging for over 30 years (that doesn't mean I don't have a lot to learn). Every new arrangement is a new challenge.
I agree finding the correct key for a keyboard piece is critical. My first step is to move a keyboard piece to a closely related "guitar" key, ex: E flat to E Major or D Major. The next thing I do is write the top melody on the staff, then the bass. These are usually the two most important voices (depending on the style of music). Then I cram in all the middle voices. At this point, the staff looks pretty messy, but then I start eliminating repeated notes in each chord, unless there is a reason for the repetition. (Some composers double notes in some chords due to their importance in the progression.) It is critical not to change the spirit of the piece. This being said, I try to use a sparse accompaniment for pieces that have many melody notes and more accompaniment for pieces that have long held out melodies.
I agree with alp in the previous post. There are many piano pieces that do not work on the guitar. I would go a step further and say there are many composers one should try to stay away from. For instance, I would never transcribe a Beethoven piece for the guitar. Mozart is mostly off the table, and there are probably only a few Chopin pieces that work on the guitar. Music written for the piano during the Romantic period were conceived for that instrument. The high notes are high for a reason and the low notes are low for a reason. In order to play many of these pieces on the guitar, an arranger must use octave transposition, which often distorts the intentions of the original composer and weakens the piece.
Music from the Baroque period works well on the guitar because the range and timbre of the clavichord is similar to that of the guitar. The harpsichord is also very close to that of the guitar (depending on the instrument used by the composer). Bach's music is unique, in my opinion, because he wrote pure music that works on almost anything. I've even heard convincing renditions of some of his pieces played on Tuba(s).
I think we must be careful about which pieces we transcribe for the guitar. The piano is a beautiful instrument that brings out what is necessary for its own compositions - and it's the same for the guitar. As an example, I would hate to hear a pianist arrange Recuerdos de la Alhambra for the piano. It could be done, but it would sound unnatural. I did hear a pianist play Romanza and it irritated me for some reason.
This being said, it's a good idea for guitarists to arrange music. Besides increasing the music available for the the guitar, it teaches the guitarist a lot about music and how it works. It is also the best first step toward learning to compose your own pieces.