Question

In oral tradition, why might animals have generic names like “Loon” or “Muskrat”?

Answer 1

Etymologies can be tricky. Why is a cow a cow? Simple names given to different animals, they had to be called something. I looked up Muskrat, and it was given its name by the Native Americans, which originally meant "it is red" referring to the color. Many names come from older languages, and, probably, most were descriptions of the animals. This makes it easier to identify if you have only heard about it.

TLDR: I think that most names come from some form of description of the animal (mostly from older languages), which would be easy to remember.