Ah! BRUNO is one of the bears from
Mr. Bliss (as well as being a Bracegirdle - I get the feeling Tolkien didn't much like the name.)
3... a festival is a GALA, and if you add both English articles, you get Farmer Giles' ill-fated cow GALATHEA.
2. The first half of the clue seems to point at the BADGER-FOLK, but I don't know where the insects come into it.
The password could be BEASTIES if you were feeling cutesy.
hS