One of the reasons is that Complex Metamorphosis
hadn't evolved yet. Lots of insects hatch from
eggs as tiny versions of what they will eventually
become. Being that they have their skeleton on
the outside (exoskeleton) that doesn't grow by
cell division, but rather splits open when outgrown
to reveal another shell inside that the insect then
grows into (and often out grows several time during
their development (called Instars).
Higher forms of insects change , metamorphosis)
through dramatically different stages, like the
difference between a caterpillar and a butterfly,
accomplished during a pupal stage wherein the
entire mass of the insect beaks down and rearranges
to emerge as what appears to be an entirely different

Another reason for the later appearance of insects
that depend upon flowers (pollen or nectar)for food
is that flowering plants had also hadn't evolved yet.

Like you
(and any normal human being)
"BUGZ" gave me the heebie-jeebies too, to the point
where I couldn't bring myself to even touch the
pages of books that were covered by pictures of
insects... I used to grab the page by the extreme
corner and flip it over (hoping there weren't more
on the next page! eek )

I didn't get used to insects until working in the
County Gardening Hot-Line Office... where people
would always be handing me insects (both dead and
alive) for me to identify, and instruct them upon
HOW-TO kill the lil' buggers. shocked

One reason I didn't like them was because I thought
they'd BREAK as soon as I touched them, and all this
ickie green stuff would come oozing out! sick

Turns out that they're far more robust than one would
imaging ...given their size, and could withstand a
good deal of handling...

Wait.. Ah.. now I remember... MY HUSBAND (r.i.p.)
was an science buff (later to become a chemistry
professor 'til the day he died) anyway, he had a
childhood interest in entomology, and was forever
grabbing bugs to examine... then he'd inevitably
tell me to, "Hold out your hand" smile "NO!!!!" cry
and he'd always say the same thing.. "Go ahead,
let it walk onto your hand... it couldn't hurt you
even if it wanted to." smile

So yeah, it took a bit of exposure, but I got used
to it. lol NEVER thought I'd be allowing caterpillars
to walk all over me while I cleaned their enclosures,
let alone foraging for their food plants and feeding
them several times a day for weeks at a time.