The eggs ARE inserted into the caterpillar. What you are seeing are the pupal cocoons, where the hungry little larva pupate into another adult wasp. This process starts after they have eaten the caterpillar from the inside. Once the development is complete, they'll emerge from the cocoon and fly away.

So strange! I wonder how the hornworm can still be alive after having been eaten from the inside out. Doesn't sound very pleasant to have to live thru. I wonder if the hornworm is in pain?

Concerning the ability of insects to feel pain, I read that they cannot feel pain as humans do.

Pain as we experience it is based on our nervous system. We have special nerve cells called "nociceptors" whose sole purpose is to create the sensation of pain. Without those special cells, we wouldn't feel pain. Stroke victims often lose the ability to feel pain if these cells are damaged.

Insects and other arthropods don't have any nociceptors. They can feel sensations, but pain is definitely not one of them.

In addition an insect's nervous system is directly connected to the muscular system, and not to the central cortex, their rudimentary substitute for our much more complex brain.

If the 'proof is in the pudding' one can observe that an insect that loses a leg will calmly limp away which certainly would not be the response for humans or other vertebrates.

I do believe that humans have a tendency to be Anthropodenial, including the egocentric belief that humans are 'special' and no other animal could possibly suffer the way that we do. But is this case it appears to be true.

I remember studying Biology in tenth grade, there is another big difference betwen insects and humans. They have their skeletons on the outdside,called exoskeletons ,while our are on the inside of our bodies, under our skin. . Oh, and our central nervous system is inside our spinal bones. Not sure if it's important, but I'm sure insects don't feel pain as we do. I don't feel guilty when I squash insects and spiders I come across in my garden. Yes, I know I should leave spiders alone, they are good guys.

Spiders CAN be good, but some of them can also be bad. I have Wolf spiders, and they bite humans. I kill them, even though they also kill pests.

The bites aren't dangerous, but they are itchy/painful.