I created two Android Studio applications. One of them is aar library. I used this aar library in second application. I added aar library by using File->New->New Module->Import
I was having the same issue, had tried every form of including my local aar in my project, tried every method of rebuilding, invalidating caches etc, but I was still having the problem where changes in my local aar were not available after updating the file in the libs folder.
The only thing that worked for me was this:
Now the changes in yourlib.aar should be available in your project. If you have this lib included in multiple modules I am guessing you'll have to do it for each module. Not ideal, but I spent at least 5 hours on this issue and these steps were the only way I could seemingly force the changes. I am guessing that removing the library from the gradle file and then syncing will force it to pick up the new one when it is added again.