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Base station required?
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Is the base station required or will a pre-exisating wireless network be sufficient to manage the cameras?
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A base station is always needed. While the cameras use WiFi to communicate, it's only to a dedicated base station. Any other wifi, such as from a router is of no use. The base station must use Ethernet to communicate to the Internet and, hence, withe the Arlo servers.
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From my limited technical understanding, I believe it also acts as a dedicated helper for the cameras and your system, relieving your router of any extra bandwith load. And lastly, it's fairly smallish and unobtrusive (or about the size of a piece of paper only a bit thicker.