I first mounted sr0 to /media/vbox (create the folder if it doesn't exist) using mount /dev/sr0 /media/vbox
Then when I ran the guest addition script (inside the /media/vbox folder) using ./VBoxLinuxAdditions.run (this uninstalls and reinstalls the guest additions)
To install linux-headers, I did pacman -S linux-headers and then ran /sbin/rcvboxdr setup as instructed by the Guest additions script
After that I rebooted and then Shared Folder seemed to work.