Good points. I never thought about what they *should* have looked like as babies. And even the giant insect of 300 million years ago were not the size of the Xindi insectoids.
Earth once has dragonflies with a wingspan of a hawk, and scorpions that were 2 feet long, yet even those animals do not compare in size with the Xindi insectoids. Its believed that Earth's atmosphere had a richer oxygen content when the giant insects lived, and they would not be able to live in our atmosphere today.
But in the Star Trek universe, every planet is exactly the same as Earth - same atmosphere, temperate climate, same gravity, and same humanoids. So it really isn't much of a stretch to believe giant insects could cohabitate with primates in the same world. After all, everyone else seems pretty interchangeable.