ARP entries are not renewed every 120 seconds. Windows ARP entries expire after 120 seconds of "domancy" by default, but are not renewed unless there is need. DNS has nothing to do with the process -- ARP resolves MAC addresses, DNS deals only with IP resolution.
Any operation that connects to another computer, waits more than two minutes then connects again will make a ARP request. You are likely to see frequent requests from your WINS server, mail clients that are set to check for mail every 5 minutes, networked printers that are used frequently for small jobs, networked database app if there are more than two minutes between transactions -- could be a long list.
In the end, whether or not it is normal will depend upon the type of traffic on your network. If everything works correctly, the average requests per second should not exceed (H*(H-1))/120, where H is the number of hosts on your network, keeping in mind that switches, routers, print servers and just about anything else that is wired to the network counts as a host. It is possible to see a bit more, as a certain number of requests will not get answered on the first request for various reasons. In reality, you should see much less, as each host would have to be waiting just over two minutes then contacting each other host on the network.
Look at your sniffer output, not familiar with Etherpeek but you should see something in the form of 'who has xxx.xxx.xxx.xxx' where the xxx's represent a IP. If you see a lot of queries to a particular host, could be that host is not responding properly. The other part of the ARP should be 'tell xxx.xxx.xxx.xxx'. If you see the same IP there a lot to duplicate hosts in a short time, could be that device is not caching properly. Might need to increase the retire time.