The simplest question is, "What does 'bateau' mean?"
You can answer it either by giving a translation (It means 'boat') or by explaining it. (What does 'appellation contrôlée' mean? It means that a wine is from a particular region and is of a good standard.)
But both the formulations you suggested are idiomatic. I think you're confused because the meaning of 'in' differs between the two.
What does "bateau" mean in French?
= What does the French word "bateau" mean?
What does "bateau" mean in English?
= What is the English for "bateau"?
The first question can still be answered both ways. "In French" is basically redundant, unless the word also appears in other languages. (What does 'Handy' mean in German? It seems to mean something different to what it means in English)
The second question invites you more clearly to give a translation.