most if not all are 1 track in size and 0% utilized, is that the reason why it's not getting backed up
Possible, but we cannot say since we don't have access to your site's storage management policy data. This is one of those cases where you MUST contact your site support group and find out what is going on through them. We can make guesses but since we don't work at your site, we have no idea about the set up of SMS and why the ARC0734I message is appearing. Only someone working at your site -- like the storage management team in the site support group -- can help you with this issue.