My Falcon hasn't faced a good squirtle yet, but from what I recall squirtle's range is really short so you can probly get him with tilts and shieldgrabs and falcon kick if he's coming at you on the ground (except the shell, which you should jump over).
If he's trying to approach you in the air (and this is my general strategy against people who SH a lot for approaches) try a full hop (so you're above him) to diar, falcon kick, or even knee, or you can short hop backwards while he SH's forwards to hit you, and throw a falcon punch at the spot u were standing (punch only really works if can anticipate and jump at the same time; if you jump too soon then they won't throw the aerial, too late and they'll land before you and shield unless they use something with a bunch of landing lag).
If he's DIing away after he throws his SH aerial then dodge/block it and follow with a falcon kick or raptor boost (maybe fsmash, ftilt, or dtilt too, don't know how far back he can DI).
As with all the really short characters, it is hard to time an aerial to hit them before you hit the ground, so if you have to approach don't do it from the air. (lagless dair is nice but is a defensive move against ground approaches; don't approach with it)
Anyways that's all the stuff I would try some of it might fail horribly since I don't know what a good squirtle would do to stop me.