#2 gives some great ideas for you to get started with. I would add that there is a sense in which you need to examine the way that Gregor's transfomation is only physical. Really, he has been a "bug" for all of his adult working life. His transformation only exposes the way that he has been treated like a bug by his family and his manager.
In order to think about this topic, start brainstorming your connotative associations with insects. How do they look? How do they behave? Where do they live? How do they live? How do human beings generally feel about bugs, especially bugs in their homes? Once you create your list of ideas, the next step is to see if there are any connections between being a bug and Gregor's existence as human being. You could also consider how Gregor is treated after he becomes a bug. How was his life like that of a bug? Once you start seeing those connections you should be able to write a well-argued analysis of why Kafka choose a bug, rather than some other creature to make his point in the story.
Here is one idea that you could consider. Bugs are hard-working; they toil their whole lives for the good of group. Gregor works very hard to provide for his family. He has sacrificed his personal life and his personal happiness to do what he thinks his family needs for him to do. You would then need to provide specific details from the story to support those asertions.
Once you have crafted several examples like the one above, you should have enough ideas to create an excellent essay!
I, too, have a topic where I must "discuss" the main events and talk about how the weakening of Gregor (him becoming less of a human) ends up strengthening the family.
My English teacher and I discussed this for a long period of time. Here are a few things I came up with. In the beginning, Gregor is awoken by "unsettling dreams" (we don't know what these dreams are, but still), he talks about the job he dislikes, why he has this job, and his lack of friends because of this job. In my "Ah-ha!" moment, I exclaimed, "Perhaps Gregor is a bug so that his family cannot take advantage of his work any longer and so that the family can learn to pull their own weight."
Now, why is he a bug instead of other creatures? Maybe simply because insects are something we as humans detest and find to be the most insignificant. Symbolism, per sé, of how his family treats/ed him. When Gregor is a bug, they treat him as a bug, desensitizing his aptness to be human.
I wish you the best of luck on your paper. I hope my points prove helpful. Happy writing!