At least in the U.S., "bug" is a very common synonym for "insect."
If Welsh makes the same destinction between the two as British English does then that would be confusing.
what distinction does British English make between them?
A big insect with pincers and other scary things can be called a bug.
Interesting :) In Australia we just use the word 'bug' as a synonym for any kind of insect.
Technically, in the US a bug is some form of beatle (ladybug =ladybeatle) but is frequently used for all insects.