As Pokemons are monsters, it's not weird for me that Squirtle is part squirrel.
Could be both "squirt" and "squirrel". The Pokemon franchise is well known to be full of incredibly punny names.
Squir is probably from squirrel and not squirt. The clue is Squirtle's tail. If it wasn't its tail, we would say that it is Squirt.
I've never seen anyone fall in love with a Pokémon within such a short amount of time