New tile shower

We are putting the final touches on our basement finish and the last thing on the list is the shower. Most of the work was done by my dad and I but some was professional. We did have a plumber place the toilet, move some pipes and rough in the shower. For the shower arm he put a blue tube in for us to work around. Then I had a tiler come and place the tile. Well, that is done and we just need to put the arm/head on and the handle. I am very green to any plumbing and tired to place the arm but it is skinnier than that tube and shorter. Does that tube come out (if yes, it will take some work as the tile is right on it) or does it need to be sawed down or what needs to be done?

Thank you for reading.

That's a test nipple. Just remove it and install the shower arm.

Is it screwed (twisted) on or does it just pull out. The grout adhered to it so I will probably need to file it down, no? Sorry if I'm sounding dumb, I just don't want water problems in the future.

It unscrews. It is the same size as the shower arm.

Okay, another question from the novice. I started to unscrew the test nipple and a little bit of water started coming out so I screwed it back. Do I need to just turn the water off while I do this or put the handle on first and make sure it is off or both?

The best/safest bet is to shut the water off and drain the pressure.

what type of water proofing did you use behind the tile?