Do guys think about it all the time?

That is the first thing that happens to him, mixed with all the feelings.
With girls it is the other way around. Feelings firstly and unconscious sex. Fits like a glove, Jing Jang, ... Isn't that incredible lol, but is ironically also the central problem of the sexes. Only when both will give up the one thing they hold on to the most for the other, then only true love will bloom. Hard hey... but so beautiful when it truly happens and stays that way.

Mostly in the mornings and the evenings, but throughout the day almost anything can make a guy think of sex. Like a train going through a tunnel, or screwing a screw with a screwdriver, or even a stoplight going from red to green. If you consider this it would be very easy.

Update: I think when a guy sees a pretty girl, he would just want her and/or want to have sex with her, but not necessarily feels a sexual arousal. He could be aroused if she's wearing a revealing or sexy outfit, and/or some other articles that may be a fetish for the guy, such as boots or pantyhose.

I can only speak for males up to the age of 22, but the answer to your first question is "all the time". Like a ridiculous amount. Like so much it amazes me that we manage to think about something else long enough to accomplish a task.

Per your second question, for me, her showing interest is the hottest thing she can do. Males may come across as crude and confident, but at the core we're just as sensitive about ourselves. Knowing a girl is into me is the most empowering rush ever.

Some research suggests men think about sex every 3 seconds, although I know I'm not thinking of it that often. When I drive a car, it turns me on when my girlfriend plays with herself next to me. Touching me on by tummy or my member area arouses me too.

It's not too hard to sexually arouse a guy, just anything hot, naughty, and/or sexy will pretty much do.

All the time. Send him a text telling him you want him naked.