Changing Caterpillars

Yesterday, on our daily "nature walk" which my dd calls "playing discovery",we found a group of 14 caterpillars. They were on one of our plants (sorry, I don't know the name of it) and they had stripped several branches. I'm wondering if that means they are a pest?

We brought in 7 of them to watch. The caterpillars were very small - maybe one inch long. They were yellow with a black head, some black hairs (or spines?), white stripes along their bodies, and some of them had an orange spot behind their head. I looked for several hours online and in books at the library trying to identify the caterpillar, but I was unable to identify them. Also, most of them had their "tail" ends up in the air and I'm very curious as to "why." (My camera is getting very weak and with the caterpillars being so small, I could not get a clear picture.)


Today, I was amazed that two of the caterpillars who each had an orange spot behind its head had molted and were now black with a large red head and small yellow and white stripes! (see photo) They still have black "hairs", too. Very cool!

And, the ones that didn't have "orange spots" now have them! So, I guess they're the younger ones and they'll all turn black with large red heads. I'm confused as it seems like a smaller black "head" "fell off" and they have new, red heads. Can anyone explain this?

I can't wait to see what happens next! The 7 outside are staying on the same branch, so we've been able to watch them, too. I've also taken a few photos with my in-law's camera of both the yellow and the older black caterpillars and I hope to see if they turned out tomorrow.