Inside out, outside in, or a combination?

One of the fascinating things about auditioning (and indeed performing) is whether you build the physical (dramatic) side of your performance internally or externally or through a combination of the two.
Here's what I mean: Does your arm go up in measure 32 of an aria because you staged it that way, or by contrast, does it go up as a result of building your character internally, and that movement is a natural extension of that character's thought process.
I think there could be general agreement that it can be both. In addition, in the world of opera, we have an element that the world of straight theatre, and to some extent, musical theatre don't have: difficult singing passages. This element can sometimes trump all other considerations, though one could argue that being internally and externally connected to the character will make that difficult passage easier, because you won't be focusing on it so much vocally.
I think at the end of the day, you will have to decide how you want to build a "real" character for any performance or audition you do. Some people need to have the tangible first, and that outward manifestation seeps inward creating the character. Some people will argue that this is safer for opera singing, because the danger of letting emotion becoming too strong and disrupting the singing process is eliminated. On the other hand, other people do better with an "organic" process because it mimics real life. For instance, in real life you raise your hand due to an internal message to your arm, not the other way around.
As you can see, there are arguments for both sides, and I think you will find that, over time, you will access both ways as a performer.
Perhaps the real point that I want to make here is that the danger is not in choosing outside/in or inside/out, but rather in making no choice at all. This happens all too often - a singer is well prepared vocally, musically, linguistically, but the character part of the performance/audition is left to the inspiration of the moment. This results in meaningless gestures, a general feeling of discomfort physically, and a performance that leaves the audience/auditoner unsatisfied.
Make a point of deciding how you will approach this part of your performance - it will help your cause, and I think you will find, it makes the singing easier too!