Butterfree

The English name, Butterfree, comes from joining the words butterfly and free.

A butterfly is a type of insect of the order Lepidoptera characterized by antennae, a slender body, and large wings often with conspicuous and colourful markings.

Free, when used as a verb, is to release from bondage, imprisonment, or restraint. This part of Butterfree's name is really fitting given that Metapod (Caterpie's evolution) has now opened to allow the final evolution to be free of its cocoon imprisonment.

The Japanese name for Butterfree is written in Katakana as バタフリー (batafurī).

Curiously, the Japanese for butterfly is written in Kanji as the character 蝶 but can be translated to Hiragana as ちょう (chō). The Katakana バタフライ (butafurai - notice the slight difference from butafurī) refers to the butterfly swimming stroke. As such it is really just the pronunciation of the English word butterfly.

フリー (furī), on the other hand, is Katakana for being free (in this instance particularly of being free of restraints or free of control). As with the English name this fits with バタフリー (batafurī) now being free of the restraint of its previous cocoon stage.

I can only conclude that the intention was for the Katakana to be the main focus of the name (rather than any Hiragana translations with the same pronunciation). It's worth noting that Katakana is the alphabet used in Japanese to spell words of foreign origin. It is often the case that the pronunciation of words written in Katakana is very close to the pronunciation of English words (as is the case with Butterfree). In doing so, this Pokémon name would be read with the English meaning of the words in mind which are, as previously described, a combination of butterfly and free.