This is a shot of the entire tree. (I don't know why the images are being turned when uploaded to GardenWeb as they are correct on my computer.)

Chinese elm, Jacqueline Hillier variety tends to do that -- other varieties much less. I think they are called adventudinous buds (did I get it right?) -- potential branches, not insects. You can gently rub them off, if you don't like them but be careful not to damage the bark. The tree will continue to produce them. Looks like a healthy tree to me.

That is a cultivated form of Japanese elm, ulmus parvifolia. Maybe 'hokkaido' or 'seiju'. Don't do anything to them. They are dormant buds and / or what's left from pruned branches. It's a nice little tree. :)

Btw, i think, I am not 100 percent sure, the Jacqueline hillier elm is a hybrid