kat, that's a tough task you are asking from us, since this song, like many Wunderhorn verses, is somewhat surrealistic, as Arnim and Brentano (wrongly) imagined true folk songs. In the symbolism around 1800, winged insects stand for the freedom of the human mind, defying opression. Here is my go, as literal as I can:

Little ladybug, sit
On my hand, on my hand
I'll do you no harm.
You must not suffer any harm,
I only want to look at your colourful wings,
Colourful wings, my pleasure.

Little ladybug, fly away,
Your little house is burning, the children cry
So strongly, so strongly.
The wicked spider spins his weave around them,
Little ladybug, fly inside,
Your children are crying strongly.

Little ladybug, fly there
To neighbour's child, to neighbour's child,
They'll do you no harm!
There you must not suffer any harm,
They want to see your colourful wings,
And [you should] give my regards to both of them!