Arranging pop and rock songs for solo instrumental fingerstyle is not as difficult as you would think, and it can really help you develop your skills. Here is a brief strategy that I use:
Choose a song. Sounds like the easy part, but not always the case. Some songs are crying out to be fingerstyled. Listen to the song; see if you can pick out a good simple repeatable beat/bassline, a simple melody, and nothing complex in between. Some songs may have a very distinctive riff that wouldn't fit with the melody, and leaving out the riff would just not be right. The songs that I have arranged aren't necessarily songs that I particularly like, but they are ones that I noticed would suit the style.
Now, why invent the wheel? A well known pop/rock song will have been tabbed out several times over, do an internet search for "<song> tab" and you are bound to find the chords, words, tabs, somebody who has nutted out the solo. Muck around with any tabs you find to see how accurate they are. Another good source of info is midi files, believe it or not. You can open up a midi file in most tabbing software, and it will show you the tab. I quite often use this for getting the melody for the voice. You'll have to fiddle around with midis; they are usually made up of several channels, often the song will wander in and out of channels depending on what the author was trying to achieve.
I will typically work on the bassline to start with, get something that is easy to play but is in line with the song. You really want the bassline to use as many open strings as possible - E, A, D - because if you are racing around a melody up high, you won't be fretting low F's. Try changing the key of the song to fit more into what the guitar is set up for. You can also try a non-standard tuning; I've used Drop D a few times for songs that spend a lot of time needing D.
If the song has a distinct bassline/beat then try to match it. If it doesn't, then just playing the root bass note in the chord on the beat is an easy out. But try to mix it up a bit, through in double striking a note, or on the 3.5th beat in a 4 beat bar hit that bars root bass note and then hit the bass note for the next bar. Listen to Naudos basslines, they are great. Mine are simpler; what you need to achieve is filling up the bottom end frequencies.
Next tackle the melody. Start basic; just pluck a single note lining up with what the singer is singing. The bass might be important, but the melody is critical - your audience uses the melody to lock in and follow the song. The melody causes the words of the song to pop into their heads and gives them that enjoyment you get when you hear an instrumental version of a song you know. Get the melody as spot on as you can.
Fill the melody out where you need to, double or triple notes plucked at the same time to accentuate parts of the song that need it. This is where playing a nylon string comes in handy; it is easier to vary the volume, sound, timbre of each note than on a steel string. You want to make sure the melody is loud, remember, it is what the listener is focussing on.
Invert your chords where you need to, to ensure you get the "coverage" that you need for the bass and the melody. For example, if you wanted to play a first string 5th fret high A, then rather than fretting up an open A X02220, go for a root 6 A 577655. You've still got access to the bass A note (on 6th string), but there is that high A you need.
Add some mid, but don't let it drive the song. Certainly don't let it overpower the melody. I've been using a lot of little strums, say on the 3rd beat mimicking a snare drum. Traditionally fingerstylers would arpeggio fill in a mid; I still use that a lot to break the song up, but it feels olde school to me. The little flicking/stab, across 2 or three strings in the chord adds a "modern" and percussive feel, less "classical". Don't be afraid to sound out your melody in that mid flick - you can't flick and pluck at the same time. (Okay you can, but that technique is too advanced for me ;)
Now that you have built up a song, don't be too repetitive. Make little changes to keep it different and lively between each verse. You'll find that most songs are the same thing over and over, it is the words that makes it, but since we aren't using words, we've got to do something different to mix it up. Play one verse an octave up...or an octave down. Cut out a verse altogether if it is sounding too repetitive. Include any solo or bridge that the song has, even if it is just as much work doing an 8 bar bridge as doing the rest of the song. If there seems to be nothing you can do to make it more interesting, then cut it down to half a song and medley it up back to back with another song by the same band.
Write it all up in a tab editor as you go, primarily so that you don't forget the good ideas you've had. In an editor like powertab, you can play back the tab. I find this very useful to "test" ideas, for instance a tricky bass line/melody resolve that I'm having a hard time trying to play. Type it in how you think you want it to be, play it back and tweak it until you think it sounds good, then learn it!
Experiment, try some percussive body tapping, but don't let it "segregate" the song; as in, tapping should be part of the sound, not one sound-then that sound-then this sound. It will come out stuttery. Apply that rule to the entire song, the whole thing should be fairly continuous, not suddenly a few notes plucked then massive strumming and repeat. Of course sometimes this is needed for the song, but as a whole, the song should be reasonably smooth.
Well I hope I have give you some good ideas and inspiration for turning that classic old rock song you loved as a kid into a cool new instrumental solo fingerstyle cover; record a video and post it on youtube and send me a link!