Newbie: Are you supposed to restrict calories to tone up?

I’m 19, 5’2 and 120 pounds which places me at a totally healthy weight. But I have a pouch on my belly, wobbly thighs, and flabby arms - hence why I’m hoping to lose maybe 5 pounds - but what I really want is to be toned and have good fitness.

I’ve been fluctuating between 117-121lbs for the past month due to bad eating during weekends with boyfriend. I have been doing strength exercises as well as cardio in hope to improve fitness and muscle but I just wondered if there’s an actual plan to follow to tone up your body in terms of food ?

I’m aware I’ll have to continue weight training and that it will be a slow process, but do I need to be aiming to lose weight? I’m aware that if I gain muscle my weight will also go up so what am I supposed to be focusing on here ??? Should I still have a calorie deficit? if I don’t will I be even flabbier? do I need to lose weight and then gain muscle?

Thanks !