As a kid I've always loved arthur and I was an intern at Cooki Jar Entertainment.
If you've watched Arthur consistently over the years you've probably noticed that if you take all the episodes all the days that the characters have been in third grade well exceeds 180 days or even 365 days.
The reason for this is that Arthur and his friends, indeed the whole of Elwood City, are trapped in a temporal loop. They have in fact been through third grade numerous times. Of course, they have no idea. They think each time they meet Mr. Ratburn is the first time and so does he. Of course not every repetition of the cycle is exactly the same. The temporal loop continues to undergoe karma evolutions as the world of Elwood city is constantly destroyed and reborn. But each cycle has lasting effects. The reason why the character's imagination's of their future lives and actual showings of their future lives are sometimes inconsistant is because each vision of the future is it's own reality, sort of like with Higurashi. You may have also noticed that the voices of some of the characters have changed slightly. This is because the characters as well are undergoing their own karma evolutions bit by bit.
There are only three ways to escape the temporal loop. One is to become aware of it in which case it will automatically stop. Another is to get in the tardis and escape that way. Finally, they can escape by overcoming the struggles of the loop.
You see, the loop has several tests for the characters to overcome. For DW one of them was getting over her magic snowball, which took her several life cycles. For buster one of them is to not be held back, which would set him further back in the loop. only after overcoming the obstacles can they escape.
Binky is one of the characters whose Karma evolution is nearly compete. He started out as a mean bully who only listened to offensive music but by the latest season has become well-mannered, a listener of classical music and opera, and even helpful. Muffy is a little farther behind but has also matured some.
But the thing is, they are all running out of time. Soon the temporal loop will collapse and implode, and Elwood city will be destroyed for the last time. That comet Buster discovered in Season 6 was a sign of this.
Madine is a spirit being from another world trying to help DW escape, but even she is fading away. The aliens that appear in various episodes are observers that maintain the temporal loop.
Binky almost escaped the cycle when he used the time machine in the World of Tommorrow. When eh woke up he thought it was a dream when in reality he just didn't quite make it.
When the time cycle collapses and Elwood City is destroyed, everyone will be trapped in the cycle and they will never graduate. until they repeat the cycle so many times that they just fade away. They may be regenerated later, but in drastically different forms and in a very different world. This will happen unless the magic snowball is recovered.
Also another reason why they don't age i because of radiation poisoning.