There's a shine on my bug...

[Asylum Steve]

Would the reflection on the lady beetle’s shell be taken care of with a better diffusion material?

First of all, that's a very cool shot...

Think of the reflection much like "catchlights" in a human subject's eyes in a portrait. Any shiny surface of your subject is going to reflect your light source, unless it is really broad and really soft (ie overcast skies outside).

To try to eliminate it, you would really have to modify your setup, probably bouncing your light off of large white cards high above the shooting area.

I know a lot of studio shooters, myself included, now deal with small unwanted reflections in photoshop. If you think that's something you might be able to do, it would probably be easier.

Also, it seems to look better at a white balance of around 4500K (cooler?). Is this normal?

Color is subjective, and "accurate" is not always the best choice. I usually go by what I like...