We did a similar cruise on the Mediterranea (7 night) back in mid-October. It was also our first cruise, and we had an amazing time. Stops were Bari, Katakolon, Izmir, Istanbul, and Dubrovnik (start and finish in Venice). We did excursions in Katakolon (tour to Olympia), Izmir (tour to Ephesus), and Istanbul (Blue Mosque, Hagia Sophia, and the Grand Bazaar), and all of them were great. I will warn you that if you're doing tours of ruins, Ephesus is much more impressive than Olympia. Olympia has been looted a lot, and requires a lot more "imagination". Tours are broken up into groups by language, so there's no problem there. And the areas that you end up going to, for the most part, are touristy, so there's plenty of English speaking shopkeepers.
As far as the English-speaking thing, don't worry. Now, I will preface this that on our cruise there were about 600-something English-speaking guests, and we had a computer conference (about 120 people) and a poker tour (British, not sure how many people). But I didn't get the impression that they were running things any differently because of the numbers. English was generally the second language for announcements (Italian being the first), and most crew members we talked to spoke English fluently. Some were a little broken, but we had no problems understanding each other. And most of them wear flag pins showing what languages they speak well (our cruise had things going in 6 languages, total).
Do yourself a favor, and learn a few key phrases in Italian, because it goes a long way (good ones to learn are "hello", "goodbye", "please", "thank you", "I don't speak Italian. Do you speak English?"). You'll find that not assuming everyone speaks English will go a long way towards everyone being pleasant (especially when not on the boat). My wife and I tried to learn a little more Italian with some of the audio courses beforehand, but couldn't make the time to finish them. Didn't really matter.
The other thing you might be concerned about is the food. I wouldn't worry. With all the complaining on these boards about the food on Costa, we found it to be good. Granted, they were not the best meals I have ever had, but I also wasn't expecting that. Costa is a lower-priced cruise line, and I expected good, but not stellar food. We still got more than I was expecting for our money. Just remember that for most Americans, your view of European food will be warped a little bit. There are some dishes that will be choices that just don't show up in the US (like the vitello tonnato, which is veal served cold in a tomato sauce). Keep an open mind. I will say, however, that for our second formal night, the lobster was way overdone (and mine wasn't the only one). I found that being in the second seating was good, because our waiter knew from the first seating what people were saying was good or bad for the night. Oh, and if you like wine, the wine packages with bottled water are a great deal. And if you get the chance, try the private dining restaurant at least once. We did, and it was well worth it.
Hope I'm not too late to help out