Andy,
I get what you're saying, and I actually think most people would agree that a fly has a degree of intelligence, just not much. There is merit in your point about goals.

Before you start thinking about "minds" and "cognition", you've got to think about machinery in general.

I thought that's what I was doing. If you look at the "machinery" of intelligence, you find various cognitive faculties, AKA "mental abilities." The ability to do basic math is a cognitive faculty which is necessary for the pursuit of certain goals, and a factor in intelligence. The better one is at math, the better one is at pursuing certain goals, and the more intelligent one is in certain ways. Same for other faculties.

How would you define self-direction? I'm not sure a fly has self-direction, though it can be said to have a modicum of intelligence. Flies act solely on instinct, no? If they're just responding automatically to their environment based on their evolved instincts, then in what sense do they have self-direction?