People painting each others arms bright colors.
There are people brightening up each others' arms with paint.
Sentence 2 is a rephrasing of sentence one about people brightening and painting each other's arms.
exists e1 x1 x2 x3.(r_bright(e1) & Time(e1,x3) & n_color(x3) & Actor(e1,x1) & v_arm(e1) & all x4.((-(x4 = x1) & n_person(x4)) -> exists e2.(Theme(e2,x4) & Actor(e2,x2) & v_paint(e2))) & n_person(x1) & (x1 = x2) & n_people(x1))
exists p1 x1 x2 x3.((x1 = x2) & all x4 x5.((n_arm(x5) & of(x5,x4) & -(x4 = x2) & n_person(x4)) -> exists e1 s1 x6.(with(e1,x6) & n_paint(x6) & a_up(s1) & Manner(e1,s1) & Theme(e1,x5) & Actor(e1,x3) & v_brighten(e1))) & n_person(x2) & (x2 = x3) & n_people(x2))