Does prose refer to the makeup/arrangement of words rather than the actual meaning of the words themselves?
Don't take this as fact until somebody smarter than me follows up, but I think prose is just a broad distinction of the type of writing. Basically, any fiction you write is either going to be prose or poetry. So if it's not poetry it's prose.
Unsavory is right. Prose is the opposite of poetry. Fictional means just what it says. So Prose includes everything that isn't poetry, and fictional prose means novels, novellas, short stories, etc.
Prose also refers to ordinary, uninspiring, dull language, although that definition is less commonly used these days.
"Prose" refers to unmetered (or, at least, unintentionally metered) writing that's meant primarily to communicate something, generally in sentences, paragraphs, and so forth (it'd be stretching the term to call a grocery list "prose," e.g., or even a dictionary). If the writing is meant to convey a fictional story, then it's fictional prose. "Prose" is usually distinguished from "poetry," although it's not unusual to read poetic prose, or even prose poetry, for that matter. I'd say it includes meaning, makeup, and arrangement of written words (as opposed to spoken words), all of which generally conform to a conventional grammar for the purpose of being understood with some clarity by a reader.