caterpie is like sorta freakin out or some shit because he has been free all his life, but not truly free as ignorance is not freedom. now that he's been caught by some half-wit trainer, he is finally maturing instead of dicking around in some forest. he now has the responsibility as a moral agent to make decisions that can affect not only himself but ash and the rest of his pokemon team. wracked with this and the regular existential despair that comes with realizing that most of your life has been a lie and that there are no room for objective morality in this possibly meaningless world(maybe the purpose is only to catch them all) he now is troubled by the fact that the second person he has met, misty, is, for some childish, girly reason, disgusted by his very nature as a "bug" pokemon. (I wonder yet if there are any real bugs or even animals in the pokemon world, leading me to wonder how you can call something a "bug" pokemon when there are no "bugs" to even understand this analogy) now that he finally has a place in the world, he wonders how he can earn the respect of less intelligent beings (misty) who still hate people and animals for trivial and intangible things such as being "squirmy" as well as how he might leave some mark on a world filled with endless more caterpie and even more pokemon who may objectively be more useful than himself. ultimately, he seems to decide that evolving may be his only way of being truly useful to a trainer inexperienced enough to not even know that caterpie is almost worthless and possibly so is even butterfree.
pikachu is just doing some flips and shit.