A: Depends on the kind of caterpillar.
Some are herbivores and eat only a certain kind of plant.
Others are predators and feast on the eggs and larvae of other small insects.
A few are cannibals, eating other caterpillars to survive.
None of them eat dead human flesh.
You are thinking of maggots.
Caterpillars will not help you dispose of a dead body. They won't pick it clean and make it harder for authorities to identify.
Caterpillars will mostly crawl around on the body for while, then become butterflies. Many, many butterflies.
The butterflies will fly up in the air, creating such a spectacle, that all the children in the neighborhood will come running to find the source of the magic butterflies.
But instead of finding a magic butterfly kingdom, these children will find the corpse of an old woman, a sad little man frantically trying to dig a hole, and an astonishing amount of Disney porn.
You can imagine the children's disappointment.