Fun fact: Scientists have determined that a moth or butterfly may not remember being a caterpillar, it can remember experiences it learned as a caterpillar. Hence I'm not sure dissolved is quite the right word to use because the nervous system stays with the creature during there process. The most accurate word is metamorphosis, since that's the word we gave for that process.
The other detail is that at the end of the process is a butterfly, so y'know, there's that.
I think dissolved is the correct term since the caterpillar turns into goo, which turns into the butterfly. Given how the metamorphosis works, it's still an open question how it's able to retain memories. A brain floating in a bath of goo?