I’ve read on plenty of sites that squats are the most effective way to drop weight and tone your butt and thighs.
Drop weight – no. You need to do aerobic exercise (get up a good sweat with your heart pounding – jogging, sports, kick boxing, etc.) and eat fewer calories than you expend in a day to burn fat.
Tone butt thighs – Yes. You are going to tighten up these muscles. Also, there is very little truth to what you were saying about weight loss. The more muscle you have, the more calories your body burns, BUT muscle weighs more than fat. The muscle building alone will not produce the fat loss you are seeking.

I have cellulite in my butt and thighs, will squats get rid of it?
No – Cellulite doesn’t have to do with muscle, it has to do with fat. There are a couple things you can do to improve the appearance of cellulite, but you can’t really make it go away. (1) Drink water to hydrate your cells. (2) Massage the area to increase blood flow. Supposedly dry body brushing (do an internet search for proper techniques) is the most effective tissue massage for cellulite. (3) Try some creams and gels, but know that all results take time (1 month+) and are temporary (1-2 days).