I know it's better to lift heavy and do fewer reps, and that's what I try to do with my regular weight-lifting routine. But I also like to do some upper body work while on my recumbent bike. I have 10 pound dumbbells that I use for bicep curls and a couple of other exercises. I do sets of 10-12 every 3 minutes so I end up doing at least 10 sets during my 40 minute workout. I like that it gets my heart rate up, but is this a bad move? I feel like I'm getting some benefit from it and I lift slightly heavier weights (16 pounds) when I do my normal routine, doing only 2 sets per exercise. I feel like I've lost a little upper body strength, either from age (I'm 54) or from the calorie restriction so I'm concerned that my more reps/lower weight thing might be counter-productive.

Any advice would be appreciated!

What you are doing is good for your endurance, i.e. small weight with a lot of rep, but no more than 20-25. If you can lift weight for more than 25 rep (you need to be EXHAUSTED at the end and NOT ABLE to make another rep) then what you are doing does (almost) nothing to your body.

Your muscles will get more endurance, but they won't be stronger/bigger, and won't really change your body composition.

However, if you want muscle strenght/mass, you need to lift heavy weight (3-6 rep until you are exhausted).