Lucky you - I went last year and had a great time, although I see it is a different hotel this season.
It was very hot during our visit and although most of the ladies dressed up somewhat for the opera, I didnt. Comfort was the way to go for me.
I would say dress as you would if you were going to a sports event.
I didnt upgrade and sat on the steps. They were boiling hot! Wore my coolest trousers and top. For what it is worth, if you are sitting on the steps I would suggest that when you go up the stairs to the arena, dont go to the rows behind you. There are about two rows in front of the walkway that you are standing on. If you sit on the nearest row, you have somewhere to rest your back without anyone;s legs in your way. I had bought a camping type blow up seat cushion which was good for my back.
I looked up a lot online report s and instead of buying the cheap blow up cushions on sale outside the arena, I hired one of the more solid ones that were on hire inside. They are much more comfortable (in my view) and you dont slide off them like the others.
I noticed that many of the Italian(older) ladies took off their shoes and put on mules or slippers. If you have binoculars, take them as it is fun watching the smarter people arriving later with some gorgeous clothes because you have a long time beforehand just sitting there. I honestly didnt think it worth the money to upgrade - a matter of choice of course. If you do, you have a numbered seat so you can go and have a meal beforehand which we couldnt. Anything else, let me know, although of course all these things are a matter of opinion.