In a medium saucepan, bring the milk to a simmer over medium heat. Add the cod and bay leaf and cook for 5 minutes. Using a slotted spoon, transfer the fish to a large bowl and flake with a fork. Season with the lemon peel, half of the lemon juice, the parsley, Old Bay Seasoning, marjoram and hot sauce; season with salt and pepper. Add the onion and two-thirds of the garlic, then add half of the cracker crumbs and the eggs; stir to combine. Divide the mixture into quarters and form 3 patties from each quarter (12 patties total), about 3 1/2 inches wide. Coat the patties in the remaining cracker crumbs.
Meanwhile, in a large skillet, heat 1/4 inch olive oil over medium heat. Add 6 patties at a time and cook, turning once, for 6 minutes.
Using a food processor, mix together the roasted red peppers, yogurt, dill and remaining lemon juice and garlic; season with pepper. Serve 3 patties per person, with the sauce, lemon wedges and arugula.