Yes, that's correct, opera crowds were more lively in the past. There are a few great hold outs on demure opera behavior - La Scala in Milan is probably the most notorious, though /u/thesweetestpunch is correct that lots of opera houses in bigger cities do get flare ups, Met's been having some protests, absolutely nothing new for the Met, they get lots of protests. Wild bursts of applause after very moving arias (or just popular ones - I've never been to a Magic Flute where people didn't clap over the Queen of the Night aria, even when the soprano totally blew it) are still normal and accepted by the crowd, even in rinkydinky Peoria-style opera. We're definitely still a more lively set than those sorts who grimly stare at the orchestra on stage during symphonies and get mad when people cough. :)

What was actually going on in the opera? Was it merely for socializing? Why bother having an opera then?

Mmm. I think you're being a bit harsh on the past! You been to a baseball game in the past few years? Did you sit there the entire time and earnestly watch the game as a serious display of physical performance? Or did you maybe go up and get a beer and some nachos and talk to your friends during the boring bits. That's about how you should think of opera in the 17th-early 19th c. It it's possible to appreciate something and still socialize during it. Although many, many people who went to the opera went to the opera because it was The Place to Be Seen, and the arty-farty sorts (like Charles Burney) would complain about crowd behavior getting in the way of the performance.

If you weren't a fussbucket like Burney, you could do about anything you wanted in a theater box: decorate it like you liked, bring hot food from home or cook it on a little brazier, play cards, read the libretto or another book (they didn't do opera in the dark back then), send your cicisbeo down to the food vendor in the lobby for some wine and gelato, or pull the curtains and have sex with your mistress if you want.

What about the people who didn't have private boxes?

This is going to vary from house to house and city to city, but generally the pit seats (non-nobility rich or merchant class usually sat here, also high-class prostitutes hung out here) was a pretty lively place. In the 17th-18th centuries they usually bench seating that could be rearranged, and there were no assigned seats. After a riot at the opera when people threw the benches around one impresario (I'm blanking on who - I think it was the San Carlo?) had the bright idea to nail them down.

Okay, why did it change. That's a tricky question, and I don't think there's one clear reason, but there's a few arguments I can give you:

The first argument I will give is put forth by Snowman in The Gilded Stage: A Social History of Opera., which is a very nice book if you have the time.

So, Napoleon was fond of Italian opera, and made a point of visiting the Paris Opera when he was in town. He would commonly come in to his box mid-way through the performance and everyone, including the performers, would stop and applaud him. So if you were French in the time of Napoleon, opera was a cool place to be, although it was before of course. Napoleon, in his various reforms, brought in the rise of upper-middle class people (which I won't go in to in great detail), but it meant that people who before could not afford opera were interested in going. However, these people were not aristocracy willing to rent an opera box for the whole season, nor were they the sort who wanted to stand or sit in the pit, no, they wanted to go and see Napoleon, and they wanted to sit in a box, and they only tickets for one or two performances. So opera saw a sudden influx of people who were not used to opera, and who were not attending regularly. In addition, strangers would be put into a box together, which would obviously cut down on the socializing. People started being quiet and paying attention to the entire opera for the entire time, mostly out of awkwardness at being in a new class status and being around strangers.

I'm fond of this argument, if only because I love class and economic history in opera a whole whole lot. However, French opera stayed wild for a long time after ole Naps was in power (see this), so maybe, maybe not. Neat argument though.

Now, a slightly different argument, and a bit more conventional. It's Wagner's fault opera is not so fun any more. Wagner was very serious about his opera being Art, and he wanted you to sit there with no talking and watch his opera goddamnit. Wagner popularized three very important things for modern opera watching - turning down the lights to bring your eye only to the stage, hiding the orchestra, and the modern style of theater architecture you will find familiar today. Take a look at Bayreuth. Big mass of seats fanning out from the stage like a ray gun, very familiar. There's boxes, but the privilege is to the floor seating. Look at an old-school "horseshoe" opera house. Boxes and boxes and boxes... The new "immersive" style of theater switched the best seats from the boxes to the floor. You can also see a good before and after on the evolution of opera house architecture and the downplaying of the box with Old Met vs. New Met. The architecture I think is very important in the quieting of opera, there's just something naturally suppressing about sitting in row seats instead of boxes. I have elected for box seating a couple of times and I find it a little strange, but I do feel way more free to whisper to my husband when we're all private and boxed in.

Well this got big! Let me know if anything's confusing. I am working on a book about the birth of commercial opera in 17th c Venice today, so I got opera crowd behavior on the brain as it is. :)

Opera decorum has changed substantially, but don't think that it has changed to the degree that everyone is now perfectly polite and well-mannered. Operas in major cities (especially in Europe, but occasionally at the Met NYC) you will still have pronounced cheering, hissing, and booing. The opera scene has been and remains semi-distinct from the "classical music" scene, which has over the past century and a half become so reserved that applause between extended silences is frowned upon.

This is offered as a qualification to your question, not as a full answer. Also you will need to clarify whether you're talking about Europe or North America, as those are and were totally different opera scenes. Even between different northeastern US cities you'll have distinct opera going cultures in the 19th century, with NYC - filled with German and Italian immigrants and with operas being staged in concert halls and beer halls by the dozens for audiences who know them as well as you or I know the Beatles catalogue - being initially a very rowdy scene.

I highly recommend Joseph Horowitz' Classical Music In America for more reading.