So from what I can find, you’re right in that it’s not 100% goo, but it’s not really “coordinated small steps either”. It’s a messy fluid process that all sort of happens at once. When caterpillars are inside their chrysalises, they first digest themselves by releasing an enzyme. But this enzyme doesn’t break down everything. Some organs are completely dissolved and completely new ones are grown from the goo, but most only partially, and are moved around remodeled into their butterfly counterparts. As for the entirely new parts, like wings, they’ve actually been inside the caterpillar since before the cocoon as these tiny clumps of cells call imaginal discs, and it’s only during metamorphosis that they begin to develop into their full size organ. It’s really cool, and you should read more about it. I’m no expert, so I’m sure I explained it badly, but here’s some good links.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6711294/

https://downloads.hindawi.com/journals/psyche/1897/062863.pdf

I’m not an expert, but there’s a good overview of the process here: Nat Geo. You can de-paywall it at the usual places. They describe it more as “an organised broth full of chunky bits” as some organs don’t break down.

It’s a fascinating process either way.

Here’s the paper:

https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0001736

Insects that undergo complete metamorphosis experience enormous changes in both morphology and lifestyle. The current study examines whether larval experience can persist through pupation into adulthood in Lepidoptera, and assesses two possible mechanisms that could underlie such behavior: exposure of emerging adults to chemicals from the larval environment, or associative learning transferred to adulthood via maintenance of intact synaptic connections. Fifth instar Manduca sexta caterpillars received an electrical shock associatively paired with a specific odor in order to create a conditioned odor aversion, and were assayed for learning in a Y choice apparatus as larvae and again as adult moths. We show that larvae learned to avoid the training odor, and that this aversion was still present in the adults. The adult aversion did not result from carryover of chemicals from the larval environment, as neither applying odorants to naïve pupae nor washing the pupae of trained caterpillars resulted in a change in behavior. In addition, we report that larvae trained at third instar still showed odor aversion after two molts, as fifth instars, but did not avoid the odor as adults, consistent with the idea that post-metamorphic recall involves regions of the brain that are not produced until later in larval development. The present study, the first to demonstrate conclusively that associative memory survives metamorphosis in Lepidoptera, provokes intriguing new questions about the organization and persistence of the central nervous system during metamorphosis. Our results have both ecological and evolutionary implications, as retention of memory through metamorphosis could influence host choice by polyphagous insects, shape habitat selection, and lead to eventual sympatric speciation.

What’s surprising? You can basically poke a hole in any living thing and goo will drip out if the hole is large enough.

OP pointed out the fascinating specialty of complete transformation with an intermediate liquid state.