Eric Carle wrote several books suitable for young children that relate to bugs. Since bugs are such a fascinating topic to so many children, there are a wide variety of books available. Crafts can be anything related to bugs. For younger children, you can give each child a hand-full of assorted colored pom pom balls and some googly eyes Children can glue the pom pom balls to a piece of construction paper making a caterpillar. They can use crayons to decorate the caterpillar's environment.
Older children can also get involved in an art project with some no-bake clay sculptures.
There is a product made by Crayola called Wet Set Clay. Once the sculpture is complete, immerse the entire thing in water for at least four hours. When you remove it from the water, rinse off the gel-like film using dishwashing detergent and let the piece dry for at least two hours. Once it is dry, wipe off any remaining gel. Then children can paint their creature any way they like.