So this answer is late because this is the topic that usually is only tackled as a book, and I struggled to make it reddiable! Also you’ve kinda got two separate questions here... How did opera get “invented,” and how did it spread through Europe? They are not completely linked, and opera spread through Europe very unevenly, which isn’t immediately obvious from our contemporary view of opera.

The creation story of opera, like all good creation stories, is openly acknowledged as total bunkum but still lovingly passed down by those who kneel at the proscenium as something important to our history that still tells us more about opera than it lies to us. Herein follows the legendary story of opera’s birth. (You will see this creation story on the wikipedia page for this, but it is presented not uncritically, this is a very decent wikipedia page actually.) One aspect of opera that is largely lost to modern viewers is that to its contemporary creators and viewers it was poetry first, and music second. So, in the creation myth of Opera, it is important to consider that this is all in service to Poetry, the Highest Art.

In the beginning, there were the Greeks, who were of course a perfect society, and the original creators of Poetry and Theatre. They sang all their Poetry in open verse (or probably didn’t, it doesn’t matter here, but that idea that they sang their poetry is the base of the opera myth). The secrets of True Poetic Theatre had been long lost in Europe since the fall of the Greeks, in the Dark Ages, and the divine muses of Music and Poetry had been divided, so that Poetry and Theatre were naked, base, and untuneful. But lo! Suddenly it is the Renaissance in Italy! And a group of Great Men of History have gathered in Florence, and they have said “why do we not right now reinvent what the Greeks did?” And someone said “Ho ho ho is this why it will be called the Florentine Vice in our time period because I am down” and someone said “Not right now Fabianino, I am talking about people singing poetry at the theatre and probably it should have a lot of eunuchs in it” and they replied “Oh fine let's just do that then” and OPERA was born! And OPERA means “work,” and it is the work that combines all the work, the perfect art of all arts, combining poetry, visual art, dance, music, and acting, into one perfect package that will storm through Europe and wipe out all lessor arts in its wake. And so it did, forever and ever, amen.

Of course this is nonsense. Can you imagine anything good truly being born out of some elite arts council committee? But it’s important nonsense, because it lays bare everything that opera seria was supposed to be to the 17th and 18th century Italians who made and consumed it. It was supposed to be the highest artform, a legacy of the highest society, brought to the highest people for the highest reasons. So the opera creation myth I pass on to you (with my own… style on it) in this spirit.

The truth of the matter is that singing and acting at the same time is not a very wild idea. People in Europe got up and sang and acted and danced in front of other people before opera, have continued to do so outside of opera for the last 400 years, and they will certainly do so long after us. Lots of cultures do it. Peking Opera is good proof of the parallel evolution of Opera in situations where some people have a lot of time and money on their hands. Lower forms of entertainment in Italy were doing things quite like opera before the fancy folk cottoned on to the idea. Lower forms are still doing this. So how do we say one type of sung theater is opera like Porgy and Bess while Hamilton is not? One of the most common “what is an opera” tests we have (which you can use to ruin teenagers’ days by proving Phantom of the Opera is not an opera) is the spoken dialogue test. Opera should be thoroughly composed to be an opera, and there should be no spoken dialogue. (This rule, like all good rules, is violated whenever we feel like it, also, makes The Umbrellas of Cherbourg an opera.) So the trick that made sung theater into opera is the “invention” of recitative, which is to sing not just the hit songs in the play, but to sing all the boring bits that actually move the plot along. The only thing really unique about the first European things we consider properly OPERA is how long, fancy, and formal they are. Opera is just the idea of sung theater taken to its extreme.

So opera was born with a silver spoon in its mouth around the turn of the 16th to the 17th century, at private court performances, and it was created by private court musicians and poets. The earliest opera that has survived, Jacomo Peri’s Euridice, was performed in 1600, which is such an incredibly tidy start date we shall just use it as opera's birthday and ignore the opera he wrote 3 years earlier. And opera probably would have been born and shortly died right there in those courts under the immense financial costs of doing it, had it not been for Venice’s Carnival.

If you have not heard of Carnival, think of Venice’s Carnival as something like a 40 Day Las Vegas - a time and place where people with too much money traveled to spend it and gamble and generally enrich the pockets of those who live there. And these people like entertainment, and the highest sort of entertainment is something you can convince people to spend a lot of money to see. So when rich people started to see opera in private spheres, in response to the interest in this Hot New Art Form, Venetian theater folk started to transition their existing theatrical industry to provide it as well, and charge admission for it. The birth of commercial opera is, in many ways, the true birth of opera, not the court settings, as most of what you think of as opera, the physicality of going to the opera: the strict hierarchy of seats and their costs, the encores, the clapping, is from its commercial form. Carnival is also sort of the forgotten backbone to opera, and you can feel it propping the whole thing up even today, if you are an opera goer, although it is not commonly talked about. The Season (running from fall to shortly before Christmas, then picking up after that and going through mid spring, about the start of Lent) is an echo of when and where opera started. (And if you research early opera in Venice you have to stay on your toes for those Carnival opera dates on libretti, because they had that March 1st New Year’s.) The first half of the season got added later, and in the 18th century some singers would even work the fall half, which was the crappier half, in one town, and move to another town for the Carnival half, which was the better half that you could negotiate more money for. But that’s another story.

Opera starts to spread to other cities in Italy through the second half of the 17th century, usually either from existing theatrical groups switching over and hiring singers, composers, and librettists, or whole new enterprises being formed and hiring singers, composers, librettists, costumers, scenemakers, etc., usually these enterprises were backed by nobles. But, for how it spread outside of the Italian peninsula, I’m not sure if you have a favorite country in Europe (France from your user history?) because generally the story of how opera came to each culture from Italy is its own unique and interesting little tale… But the general history of the movement of opera is that Italian musicians were Italy’s greatest export product for about 200 years. Opera moved around with Italian people, usually courts (or other wealthy people) were exposed to opera and Italian music in some way, and negotiated and hired Italians to come bring it to them. This is the story of opera in the Germanic states, England, Spain, Portugal, Russia, Poland, and many other places, and largely the only thing that differs is the timeline of adoption. The big exception is France, who nativized opera very quickly (think Lully), and would trade ideas with Italians off and on after that, such as Querelle des Bouffons, but would not exchange singers. (French opera, for a while, had its own unique singing techniques and style, unique from Italian bel canto, but it’s homogenized now.) But most of Europe only had opera as an Italian import, in Italian, and usually made by Italians, until the late 18th century. European Opera has only truly globalized sometime in the mid 20th century, probably a couple of decades after WWII, which shook up opera very badly, as the two largest suppliers of opera singers (Italy and Germany) were, among other things, not exporting opera singers at that time…

Hit the third page on the Google doc! Which means it’s time for books: If you’d like to go buckwild on the history of opera, a great start is The Oxford History of Western Music, which is a venerable 6 volume doorstopper collection you can find at most academic libraries. If you want to just read about the start of commercial opera, there is absolutely nothing finer than Inventing the Business of Opera. For the spread of opera through Europe, there’s always my favorite, The Gilded Stage.

This is all very squishy and overview level so if you have more specific questions let me know. :)