Swimming, walking, water aerobics, pilates, and hand weights would be my initial thoughts. Thare are also those machines at some gyms where you circle your arms around to get a cardio workout from your upper body (no clue what they are called!).
I have bad knees and I still do a ton (I swim, weight lift, and walk). Since your starting out ease into and find something you love and you feel like you can stick with (something you stick with is by far the most important part!

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