mike_ant, my problem with that distinction is that the advent of the musical antedates the invention of the amplification technology you are tying it to.
Broadway Local, you don't seem to be familiar with the very rich history of operas in English over the past century. Certainly Britten and Menotti were doing superlative work with English-language librettos in the mid-20th century. Bernstein's A QUIET PLACE has its admirers as does the shorter version, TROUBLE IN TAHITI.
Since 2000, John Heggie has set DEAD MAN WALKING (IMO Terrence McNally's libretto is his best work ever for lyric theater) and MOBY DICK. Andre Previn set A STREETCAR NAMED DESIRE, etc. and so forth. All of these works have rich scores and much to recommend them.
Meanwhile, Michael John LaChiusa's works are basically "Broadway (or off-Broadway) operas" and not just because they are through composed. See MARIE CHRISTINE and his version of WILD PARTY. Works like PASSION and FAR FROM HEAVEN are much the same.
I suspect the most accurate definition may be that the difference depends on where the work is performed (i.e., SWEENEY TODD is a musical on Broadway and an opera at City Opera), but even so there is much overlap as opera singers have become better actors and more flexible singers, and Broadway singers often have extensive and even operatic training.
I will add, based on the experiences of opera directors I know, that in a show that is considered a "musical", the musical director usually works "under" the director, the latter being understood to be responsible for the entire production; in operas, the conductor often is the "boss" (and sometimes even the star) and the stage director may find her rehearsal time cut in favor of music rehearsals.
So perhaps it is fair to say the music gets greater emphasis in an opera (perhaps necessarily so since there may be more music and the vocal demands may be more difficult), but that is by no means always true. Nor is it ideal.
" So where do we stick operettas such as Gilbert and Suillivan? Are they Operas 1A or Musicals 1A...."
In my opinion (and theirs), G&S wrote comic operas. Are they as vocally demanding as Wagner? No, but who is? The dialogue in G&S is brief and usually just sets forth the exposition.
Gaveston, no doubt there are many operas in English, new and old. I've seen a few at Lincoln Center, such as GRENDEL, TWO BOYS, and KLINGHOFFER last year. But no mistaking them for Broadway musicals. Like you said, the music was supreme. The action was deliberate, and the staging was, well, operatic.
But most of all, you knew where they came from: LA Opera, San Francisco Opera, English National Opera. More than the language or the age of the piece, I'd say the location of the debut or the nature of the commission is the giveaway. If it came from an opera company it's an opera. But that doesn't preclude an opera company from doing Sweeney, just like it doesn't stop Diane Paulus from adapting Porgy to Broadway.