I wouldn't put too much thought into Ash's Butterfree; nobody ages in the anime.
Point taken. Let us then direct our attention to the manga.
Giovanni's prized pokemon happens to be a Beedrill, which has survived with him for quite a good deal of time (from his childhood onward). I think that this, at least, is somewhat credible in acknowledging that bug pokemon -- or, at the very least, Beedrill -- do not die off nearly as quickly as their real-life counterpart.
The thing is, some aren't based off of anything. Granted they look similar, but even so, they are much larger - a few inches in real life to 6 feet in the poke world.
Also, maybe someone can confirm this? : The butterfree episode, after butterfree breeds, it dies..but they changed it for the US episode...I heard that somewhere, but IDK if its true or not.
If I'm not mistaken, it was indeed implied that Butterfree die after mating (whether due to the act itself or time span, I cannot say), but the Pokemon creators themselves had actually not intended this. To dispel these rumors, they created an episode in which Ash's butterfree is seen, alive and kicking.
Wow, do you by any chance teach Pokeology at the Institute of Pokemon Etymology? :D
I just read very deeply into things. One of my major strengths is plugging up plot-holes and making things, for lack of a better phrase, make good sense.
Actually, it might be possible that the very thing that allows these pokemon to do such astounding feats (shooting mass amounts of water from their orifices, maintaining a fire somewhere on their body) is also the source that keeps them alive. By fighting, they release the impurities generated by this source and within it, as well. This may be why pokemon can "level-up" -- the source of their being is slowly becoming more and more pure -- and how they can evolve miraculously -- their body changing to accomodate the amount of energy the purified source gives off. Stones may do the same thing, but perhaps *give* something to the source that is vital for that pokemon's continued evolution, such as a slight modification to the intricate type of energy generated (even a minor change can have drastic results). This can be why even though a pokemon purifies their source with continued battles and grows more powerful, they do not evolve without the stone -- their evolved body would only be generated by the modified energy present only when said pokemon had been exposed to the stone.
Happiness may be an indication of "will", the pokemon's desire to remain with you as well as their contentment in life. It has already been shown to have an effect on their power as demonstrated with the moves "Return" and "Frustration", so it is not so outlandish to also rule that they might modify the type of energy generated from said pokemon source and produce the necessary evolution.
But I've begun to ramble...