I did indeed experiment with a Lua solution for flexible automatic line-by-line lyrics entry from text files, and it does pretty much work the way that @scott.sovereign is describing. It also allows for navigating between verses and individual lines, and even between multiple source files, all with keycommands (via the ConsoleTools framework) from within Dorico, and for ad hoc changes to any line in a outside text editor.
However, I ran into somewhat intangible problems with the multitudes of different text encodings that source files may come in, which is why I never got it to a version suitable for offering to the general public.
At this point I can only really see me packaging what I have into a ‘bespoke’ version for someone who needs it enough to justify hiring me to do that.