He rarely has feelings or emotions, and when he does, they deliver witticisms and puns, care for the welfare of others and inspire the most ridiculously devoted loyalty. He's human we know because he's mortal. Other than that, he could be a cyborg (and as been in other movies).
And then there's his German accent. It's most important. While his Austrian looks could easily blend him into America, his voice keeps him at an exotic distance.
But Arnold is always funny, always self-deprecating, and never ever full of himself. In Predator, his puns make the violence fun. Yes, he makes the violence fun at times. It's a powerful personality who can make stabbing a man and telling him to "Stick around" a good time. This isn't objectionable. It's necessary for the ultimate action movie. It helps prioritize the violence, show the audience what is horrible and what is trivial.
It's important that an alien villain should be as inhuman looking as possible. It helps create distance, as well as an inability for sympathy. A predator has no sympathy for its prey. Conversely, we should have no sympathy for the predator.
The movie, though, takes this to a more complicated level when it introduces the element of respect: it is possible for the predator to respect us while mutilating us.
Predator moves quickly. It doesn't bother with much backstory. What we get of exposition is only that which is completely important.
The characters are constructed in brief brush strokes, but we know exactly who they are. We don't need to know about family abuse or cheating wives. It's an action movie, not an Oscar contender.
Which is in itself another of its strengths. Predator never tries to be anything more than an action movie. Most importantly Predator knows exactly what it is.
The action comes in satisfying bursts full of pyrotechnic displays of gunfire and almost sexy sprays of bullets. In one scene they destroy a patch of jungle. It seems like overkill. It is overkill. But the overkill is necessary: its an expression of their terror.
The characters are smart and their goals are clear. Including the Predator's. This is why I think Predator movies are shown at Halloween. Because the protagonist's goal envelopes us and we feel paralyzed to fight or resist.