In irwin's big pic above, the pieces of metal that are stamped 'TREK' are lugs; pieces of metal that receive the main tubes. It's the old-school way of making bike frames that has been replaced by directly welding the tubes together (except for a small number of craft/custom frame makers). Sometimes people like to highlight that their bike has lugs by painting them a contrasting color, or painting their edges. Sometimes lugs have shapes punched out to reflect branding, like Colnago would have a club/clover. AlmostTrick is saying the powder coating being thick would fill in those details and make them less visible. Or again in irwin's example, the 'TREK' might become illegible, and maybe just be an oval dimple.

Butting refers to tubing that has different thicknesses, usually thicker at the ends for welding and strength, thinner in the middle. Double-butted is thicker on both ends. Triple-butted is double-butted with the two ends being different thicknesses. Here's a good explanation.

And this is worth a thousand words: