CRAFT is usually a pastime or a profession that entails a particular skills and knowledge of skilled work. It is an activity that involves skill in making things by HAND.
While ARTS is the expression or application of these human creative skill and imagination, usually in a visual form like painting or sculpture, wherein such works could be appreciated basically for their beauty or emotional capability. Another form of arts are music, literature and dance..
Crafts are things which are made by hand which either have functional or decorative purpose and are categorized as visual arts. That's why craft and arts go hand and hand together. Without CRAFT, there would be NO ARTS!!! :)