Yes, both are cladistically correct, but debatable on semantic/usage grounds.

It's not so black and white. Bug is not a scientific term (well, not in its common usage), so it has blurry boundaries. Some definitions say "insect-like", some say "small arthropod", and so on. Lobsters etc are clearly in the gray area. So "basically bugs" is pretty spot on.... it is similar to bugs in the ways that matter to the conversation.

And it isn't circular or superfluous in that conversation, since the point that they are similar to other arthropods (which we tend to not give a lot of concern to the pain they might experience), is relevant and seemed to have been missed by those passing the law.