Well, a lot of your questions truly do rely on the level of the singer.
I am a bass, and singing an octave below middle C is still very clear. I am in a barbershop quartet and a lot of the time I do have lyrics, but they can be heard perfectly. A lot of the time when a composer uses voices particularly high, they usually just use sounds instead of words e.g. Mozart's "The Magic Flute", Aria No.14 for solo soprano has a highly decorated melody that is very high, going 2 1/2 octaves above middle C. He is using a word but has just taken the "A" vowel and extended that, otherwise it would be far too difficult for any trained singer to do anything like that changing the vowel to much.
Another thing to note is that when singing high (especially for female voices) it is preferred to have a vowel sound as close to "A" as possible, "E's" are very hard to sing hhigh, and usually sound forced.
For word sounds, it will take a while to fully explain for someone to understand, so i'll give a few brief notes.
Vowels (I believe) are very important to singing. Vowels are not just controlled by your tounge, but by the position of your lips, resonating cavities and the throat muscles and area in your throat. Try now just singing an "Ah" sound, then slowly move your tounge around... you will be getting changes in timbre from different positions. One of the key things singers do is lifting their soft pallete (soft part on the roof of your mouth - slide your finger back across the roof of your mouth to feel it). When singing you get a far more resonant sound by lifting the pallete, snoring will help you lift it up.
A closed vowel for example would be the "nn" from the end of the word 'man', or "mm" from the word 'farm' and so on. An open vowel would be "ee" from the middle of 'heat' or "a" from the middle of 'part' and so on. When singing a sustained closed vowel, it sounds muffled and just not right, sing right now and you might be able to understand why. An open vowel is much more resonant and brighter.
As for breathing I think it has been adequately answered already. Singers would usually just take a breath between phrases. But sometimes composers don't want a breath to be taken and that is just marked by putting a slur between the notes. It is also good when the composers even goes through and slurs all the groups of notes he wants you to sing in a breath.
I hope this is helpfull, I might be able to make some recordings for you to give some examples of the vowels and theor sounds and effects.