Keiva writes;

Scanning through the sites, my sense is that "libretto" is used to mean the detailed story-line of a musical, and "lyrics" to mean the specific words sung when the characters break into song. For example, "In 1948 Loesser was approached by fledgling Broadway producers Cy Feuer and Ernest Martin to write music and lyrics to George Abbott's libretto for an adaptation of the classic Brandon Thomas play Charley's Aunt." But I am very tentative on this. Comments?

If the lyric is the words of a song, as a melody is the collective notes of one, then a libretto would have lyrics and melodies because it's a collection of songs in the plural. A lyric from the libretto would be a single song from the collection.

Check the dictionaries. There's precedent there for using lyric as the words of a song, though we seem to agree here that most say lyrics for words of a single song.

Collapsing here,
OrB~