What does the squirt do that stays in Bastion?

Pets do 3 things:

• If you click them enough, it will cause Rucks to say something. It will also cause them to do something.
• You can get an achievement for getting all 4 pets.
• Plot Spoiler:

Later on in the plot, The Bastion will be attacked. Any pets that you have acquired will help defend against the attack. You can fight the attack off yourself if you have no pets, but the pets make it easier. You may lose a few of your pets in the attack, but they won't do anything after the attack aside from hang out, so don't worry if you lose a few of them. As for Squirt being angry, you're fine. I did the same thing and he still participated in the attack.