In general, "law-stuff" uses the definitions specified in the law. If a word isn't defined, then they can look at how other laws define the word. Then they could look at the definition in a dictionary. This is established process.
The proper way to get this useful thing done is for the legislature to amend the law to be more inclusive.
Not quite. The problem with the way the law is drafted is that the court could have just as easily (and perhaps more likely) applied the legal rule of construction known as noscitur a sociis (Latin, it is known by its associates) and interpreted "invertebrate" in context to mean something more like wet invertebrate.
That, ultimately is what makes the drafters of the pertinent amendment to the statute look sloppy, like they do not know what they are doing. The court could have reasonably gone either way, and without some failure prone inquiry into legislative history they may not have any way to tell what the legislature intended.
The doctrine of noscitur a sociis is simply shorthand for a standard way to resolve ambiguities like this, but the court used a different rule, making the legislature look silly for allegedly defining all invertebrates as fish for the purposes of this statute. Allegedly.
No, they can't, because the legislature wrote that law specifically to protect a series of endangered terrestrial invertebrates, and chose a word that has a plain meaning that includes terrestrial invertebrates. There's simply no complexity here.
This isn't an accident of law; there was a whole huge kerfluffle in the 1980s in California about where the authority to protect insects came from, and this was considered carefully at the time.
Again, this is right there in the decision linked at the top of the thread.
Philosophy tells us this is one way to change concepts, another is to narrow definitions, both have known limitations. There are many ways to do meaningful things, by this definition "proper" just means something meaningful was done?
The proper way to get this useful thing done is for the legislature to amend the law to be more inclusive.