Vargas is not only a great left midfielder but also the best attacking left defender you can find in the game (great tackling and marking).
He comes as a Natural wing back, I recommend you to train him so he becomes a Natural left defender (takes like a couple months, training him to be an attacking left midfielder will take way more time). Then you can ask him to "run forward whenever possible" and/or "dribble down left". Also make sure you allow him to try some long shots.
He should shoot your free kicks (I only made him shoot the free kicks after half season and he has scored more of them than Cardozo and Matías together) and corners, and throw-ins in the left side. Im in game 33 of my second season and he has 22 assists in the League only! (A) Most of them are Corners, Fazio is one of my Central Defenders and he has scored 13 goals in corners so far (in the League). Chiellini is the other Central Defender and scored 7.
The left side of your team could be composed of Vargas in the back and Messi in the front for example, and that is complete kickass.
PS: I had to pay 35M€ for him, at the start of the second season. Guess thats his fair price, getting him for half that is a great deal.