So does this mean I need to configure a floating power supply connection for the Arduino setup?
Yes it looks like it.
How can I accomplish that by tapping into the 9v alread going into the effect pedal
Sadly you can't. By definition if it is already going to one piece of equipment it can't float with respect to another.
Maybe you could use an isolated DC to DC converter but they do produce noise, they are expensive and they might inject more noise than you have at the moment.
Read about them here Book of Knowledge – RECOM | DigiKey