When is it OK to ask "stupid" questions? Whenever you need to!
You're absolutely right that it is very common for people to find themselves in these situations. The reason for that is that no one will know everything as soon as they begin (a new job, project, class, etc.). And that is why there is no reason at all to consider these questions stupid. That's the first point. Besides, industry terminology and project parameters both seem rather critical, and not-stupid, to me.
The thing that would be "stupid," or not a good idea, let's say, is if you let yourself get behind just for not asking, if you undermine your own genius just to save yourself a little embarrassment ... when, in fact, the boss will probably be grateful that you're following along well enough to have intelligent, pertinent questions.
But maybe what you're trying to ask is, "how do I know when I'm crossing the line from asking intelligent, pertinent questions ... to being pedantic about it?" The thing about pedants is that they're "excessively concerned with minor details." Will your boss look fondly on you if you keep interrupting his or her presentation for definitions to every word you haven't heard before or with every little question that pops into your head? No...probably not!
How I draw the line is by asking (myself) questions like this: Can I follow along? Are the terms I'm NOT familiar with keeping me from understanding the presentation I'm listening to (or whatever), overall? If I answer yes and no, respectively, then I try to save my questions at least until the end, and if I can take thorough enough notes, maybe I can take what I DID learn and piece it together myself, after, by looking up the few terms I hadn't heard before on my own. Or if I can tell at the end that I am going to need a primer, I try to ask a brief, cogent question that gets right to the heart of whatever I'm not getting.
It is also important to do what we can on our own, as much for our own minds as anything else, and when piecing together what I can, after, that's when I usually figure out what it really is that I don't understand. And then the next morning, I just try to get in the office maybe 10 minutes early and plainly tell the supervisor, "Hey, I was looking over what you were talking about and there's a bit here I just don't understand." They're usually really happy to be approached this way. But be prepared, because you may have to say, "Well, you see..." and break down what you do get so he or she will understand what you don't get.
And just one more thing. I'm with you that it can be very embarrassing to have to raise your hand right in the middle of something, but sometimes it happens. It's really no big deal – who'll even know in 200 years, right? But when that happens, I've always found that you come across more intelligently when you can say, "If [blah, blah, blah...] and [blah, blah, blah,] too, then [question, question, question]?" instead of just, "what is [that]?"
In other words, while it's true that "there are no stupid questions," it's best to make them as smart as you can!