When I apply arctic silver 5 to my blue shark driver and xp-g r5 Led's will the AS5 act like a glue and bond to my heatsink. I read that it never drys out, so how can it hold on to stuff like led's and drivers?
There are two types of Arctic Silver. There is Arctic Silver compound like you would use on a computer CPU. And then there is Arctic Silver epoxy. The compound is as you say a very viscous grease that doesn't dry out and the epoxy dries hard as a rock in a 15 or 20 minutes. Arctic Silver compound does have better thermal characteristics than the epoxy.
The other thing is that both Arctic Silver epoxy and the compound are mildly capacitive. Either can have an effect on, or possibly even damage something like an LED driver. For that you need its twin brother Arctic Alumina epoxy.
It's just a guess, but I'll bet your XP-G's are on a Metal Core PCBs like a star or UFO. If you used your arctic silver under the PCB to the heatsink, you would drill and tap holes for retaining screws in your heatsink. That way you could benefit from the better thermal characteristics of the paste, as long as your screws don't interfere with your reflector and the paste doesn't touch the solder pads.