The 3b+ can play most games made to the mid 90s comfortably, but not games with 3D polygons. You can use a Raspberry Pi 3, but the processor is slower and it will struggle with newer games. You can also buy a kit with a case and power adapter included. They are made by many vendors so shop around for the best price because they can fluctuate. No case is necessary since it will be mounted in your cabinet anyway).
In most cases you would want to use a landscape cabinet so that you can maximize the screen space. There are two different screen orientations, portrait and landscape. Not all Arcade1Up machines are ideal for all mods.
I am also coving some topics for adjusting the software settings that ETA Prime does not cover in this video which I needed to tweak, and some gotchas that I ran into
Use this guide to help you understand the steps needed. Most of the information for modifying the hardware is in YouTube, posted by ETA Prime. However for this article, I will cover using Raspberry Pi and RetroPie.
If you do go the PC route, I recommend taking a look at the Hyperspin or LaunchBox/BigBox front end for MAME.
The conventional way to update RetroPie and install new features is through the setup script. How to use the retropie setup script? Updating RetroPie.