/u/Pseudohistorian is on the right track. Maalouf's Crusades through Arab Eyes is an English narrative that weaves together Arab chronicles of the Crusades. It's an interesting methodological choice that can make it difficult to tell what source is being used at a given time, but it does make for an engaging read!

Striving to explain logistically how Muslims could lose so much ground in the First Crusade (especially the fall of Jerusalem), the chroniclers observe that the Franks are brutal and bad soldiers--but their armor is top-notch. Now. Can we trust that assertion? I think the note that the crusaders are actually terrible soldiers gives it at least some heft. I said "logistical explanation" because of course the chroniclers give it a religious explanation, God's punishment for their sins (set in the context of intense Arab infighting), but they search for how that punishment could possibly play out. It would be easier to portray the Franks as either completely incompetent, to stress the "divine punishment" angle, or to portray them as both decent soldiers and well armored, to heighten the human factor of the loss. (And it's not a case of refusing to recognize specifically good battlefield strategy; they also denounce Frankish battlefield medicine as utterly barbaric.)

In addition to Maalouf, you might be interested in Gabrieli, Arab Historians of the Crusades (trans. Costello), which offers translated excerpts from the chroniclers themselves.

On the Latin side, the Gesta Francorum actually turns the praise of armor around to the other side:

The Agulani (one component of the Arab army in question) were three thousand in number and feared neither lances, arrows, nor any kind of arms, because they and all their horses were fitted with iron all around, and they refused to carry any arms except swords into battle.

But the real interest here is Raymond d'Aguiliers. He refers to arrows bringing down crusaders who were trying to flee across a river, and later talks about a hail of rocks and arrows contributing to both death and widespread fear; he writes of men being so overwhelmed by it all they were as if "unconscious."

...Which makes it all the more impressive when he writes of the fall of Kerbogha:

In the midst of this, the lines of the enemy fell upon us who were in the squadron of the Bishop, and though their forces were greater than ours, yet, through the protection of the Holy Lance which was there, they there wounded no one; neither did they hit any of us with arrows. I beheld these things of which I speak and I bore the Lance of the Lord there. If anyone says that Viscount Herachus, the standard-bearer of the Bishop, was wounded in this battle, let him know that he handed over this standard to another and fell behind our line some distance.

So, that's the reference you're looking for. Can we trust it? Is Raymond just trying to talk up the power of what he believed was the Spear of Destiny?

Maybe you'll be the one to tell us!

Crusader knights walked through a hail of arrows and remained mostly unharmed

That is overstatement, but yes, Crusader knight were able to soak up a lot of Saracen archery and still continue to go on. Amin Maalouf's The Crusades Through Arab Eyes could be a good start for you, especially his description of the battle of Dorylaeum would be relevant for you.

Seljuk's spend good portion of the day circling round Bohemund's forces with no prevail- damage to lightly armored infantry (Tafurs and such) was substantial, but bulk of army was just standing there. And then main force arrived and jumped on Seljuk flanks. It by no means was an easy victory for Crusaders, but Seljuk's were simply staggered of how much damage Europeans armour can soak up.

Essentially it boiled down to differences in warfare: Seljuks army used primarily hit-and-run cavalry archers, while Europeans armies were orientated toward close encounter combat- bulk of the army was infantry with knights as shock troops and archers having only support role. It's not much of the guessing which of these two warfare styles will make lager investments in armour.

Personally I'm sceptical of this alleged metallurgy quality.

Metallurgy has nothing to do with it. Main armor was aketon/gambeson of some sort. That is a jacket essentially, with as many padding as possible. And, apparently, it did the trick.