Bottom line up front: larvae are found in Hades, lemures are found in Baator (Hell). But they’re both special cases—that, unfortunately, recent lore hasn’t bothered to explain.
Larvae: extra special petitioners of Hades
The souls of mortals who die travel through astral conduits to the Outer¹ Plane that best befits them (usually, the one that houses the divine realm of the deity they worshiped, or else the plane matching their own alignment). They are called “petitioners” because, generally speaking, the default goal of a petitioner is to achieve harmonic unity with the plane or deity they are associated with. On Hallowed Ground emphasizes that they’re quite single-minded about it, saying
What’s more, that single-mindedness is pretty much the only way to tell a petitioner from a regular living sod. After all, most petitioners look and act the same as everyone else (not counting those who become chaos-blobs on Limbo or archons on the Mount).
Note the mention of the petitioners of Limbo and the Mount (Celestia) being special—another special case is the larvae of Hades, per Manual of the Planes:
Petitioners in Hades are mostly grayish ghosts, spirits so depleted by the Waste that they lack solidity. They rarely speak, instead crowding around visitors like moths around a candle, seeking warmth of emotion and hope that living beings possess.
Spirits of particularly selfish and malicious mortals that come to Hades become a special form of petitioner called a larva. Larvae appear as Medium-size worms with heads that resemble the heads on their mortal bodies. Larvae serve as the currency of the Lower Planes, especially among night hags, liches, demons, devils, and yugoloths. Most are likely to be used as food to power a spell. The rare “lucky” larva is sometimes promoted to a lower form of fiend.
So larvae are petitioners in Hades, but not all petitioners in Hades are larvae. Being a petitioner is a first step towards becoming a true fiend, but most don’t, even among the “special few” that are larvae.
Petitioners in Baator generally take on the form of ghost-white “shells” of their former self.
Lemures: Lowest form of baatezu, but (secretly) not the natural evolution of its petitioners
As in Hades, only “Particularly vile petitioners become lemures,” as Manual of the Planes puts it. Most just merge with the plane, which is, again, the normal thing to happen to a petitioner.
First, a bit of planar history. The term “devil” generally describes all lawful evil fiends of Hell, but there are a few different “tribes,” if you will, of devil. By far the most dominant and numerous—today—are known as the Baatezu. Baatezu civilization got its start when Asmodeus and his cohort found Hell nearly empty, and installed themselves as its rulers.⁴ But long before the Baatezu, there had been other, earlier devils. What happened to the ancient Baatorians is anybody’s guess—in all likelihood not even Asmodeus knows that, since they were long gone by the time he got there—but the fact remains that the natural order of things is for Baator to spawn Baatorians, not Baatezu.
The official story, believed by the overwhelming majority of the multiverse and often just described as how things are even in many of our books, is that Hell is the lawful evil plane where might makes right, and the Baatezu’s conquest of the plane is sufficient to change its tune and cause it to spawn Baatezu. Thus, petitioners in Baator become lemures, the lowest form of Baatezu. By this telling, one slightly-higher Baatezu is the nupperibo. Nupperiboes certainly are slightly stronger than lemures, after all. However, it’s worth noting that nupperiboes don’t get promoted to higher forms of Baatezu. They must be demoted to lemure in order to be promoted as anything else, so even though it is “higher” than lemure in the chain, most devils would prefer to be a lemure because that’s closer to actually getting somewhere useful.² This description can be found in any number of source books.
However, most sources—including Mordenkainen’s Tome of Foes—don’t give the whole story here. And, to be fair, almost no one knows the whole story—this is a secret held by only the oldest and most powerful devils. It’s likely that not even all of the Archdukes of Hell know the score.³
In the most detailed descriptions of the hierarchy of Hell—as found in Faces of Evil—we learn that everything is not as it seems. Nupperiboes are not, in fact, a weird dead-end second-tier kind of Baatezu—they are, in fact, the lowest form of Baatorian. Lemures aren’t “promoted” nupperibo, they “revert” to nupperibo. And the rendering of nupperiboes into lemures isn’t a normal demotion at all—it’s in fact a perverse process by which Asmodeus can nip any Baatorian development in the bud, and ensure more Baatezu develop instead. Everyone believes nupperiboes are a dead end because Asmodeus cannot afford to allow them to develop—the fact that they keep spawning is proof that Baator is lawful enough to give the “natural order” continued chances to reassert itself, and will only accept the “might is right” argument if that might’s domination is truly unyielding. That is, Baator only belongs to the Baatezu for as long as they can control the Baatorian situation.
This is kept a secret because it’s a vulnerability, and because the Outer Planes are literally made of belief—what everyone believes affects reality there. If everyone—including the Baatezu themselves—believe the Baatezu have conquered Baator and it is well and truly theirs, that helps them. If belief that they are interlopers and that the plane is trying to shuck their rule becomes widespread, that can weaken their grip in fact.
It’s not impossible for souls to wind up on non-Outer Planes, e.g. if they go to the divine realm of a deity whose divine realm isn’t on an Outer Plane. Most are, though. Non-Outer-Plane destinations are by a large margin the exception.
A preference for lemure over nupperibo is common among devils, but not among lemures or nupperiboes—those creatures don’t have enough independent thought to really develop a “preference” for anything at all.
Dispater, Mephistopheles, and of course, Asmodeus, definitely know, as they were among the original Baatezu. Glasya probably does just because she’s Asmodeus’s daughter. The rest, questionable. Bel probably doesn’t, but then Bel is particularly hapless, at least for an archduke. Oh, Baalphegor, Mephistopheles’s consort, likely knows as well—she may well have been there longer than any of them, as there are reasons to suspect she is actually an ancient Baatorian (but then, she is an intensely enigmatic figure given extremely little description in the lore, and this is a lot of reading between the lines).
Asmodeus’s precise history has been given many, many descriptions over the years—and almost all of them are likely heavily influenced by Asmodeus’s own attempts to push certain narratives about himself. One of the most prominent stories—which bears at least some truth—is that Asmodeus was originally an archon who assumed command of the then-empty Hell as part of the War of Law and Chaos, as part of a treaty among the forces of law enshrined in the Pact Primeval. The Pact Primeval definitely exists—Mechanus and Mount Celestia are each known to have a copy—but exactly what was agreed upon is a matter of rumor. Most claim that Asmodeus proposed to “rehabilitate” lawful evil souls by pressing them into service in the War, and then shocked the other forces of Law by turning around and actively corrupting mortals to generate more lawful evil souls and thus more power for Hell and thus himself.