The good news is that, of the three Italian opera houses I visited, two (Florence and Bologna) had projected supertitles in Italian, and La Scala (at least in the stalls) had seat-back subtitle screens in multiple languages including Italian and English. That should tell you that even Italians need a bit a help following operatic Italian.
Even with supertitles, I think it's still necessary to study the libretto beforehand in a good side-by-side Italian/English version as suggested above. There are the archaic words, and often the word order is more about poetic symmetry than grammatical sense - particularly with Verdi and earlier. I have found, though, that the combination of a basic knowledge of the language, the effort of libretto study in advance, and the crutch of the Italian subtitles works well and has exponentially increased my appreciation and enjoyment of opera.
I like your idea of an opera phrase book. You learn pretty quickly a bunch of commonly occurring words in opera that (thankfully) you don't hear very often in everyday life. I'm not feeling ambitious enough to start a glossary of Italian opera here, and it's probably worthy of its own thread, but you'll become very familiar with the words for:
Death
Murder
Blood
Fate
Love
Hate
Poison
Sword/Dagger/Blade
Unhappy/Unfortunate
King
Throne
... among others
