Look at the first Star Wars film. The names for all of the fantasy elements are very basic: Force, star destroyer, droid, blaster, hyperdrive; all words you can basically understand as a newcomer without a glossary of terms.
I was thinking about the first Star Wars film when I first read the original post yesterday. The film gives a few sentences briefly setting the stage in the opening crawl, and then drops the viewer right into the universe, with little explanation. Within the first hour of the film, the viewer easily picks up that in this fictional universe, they call robots "droids" and Luke's car is called a "speeder." Mos Eisley is a "spaceport" and the farmers on Tatooine use "moisture vaporators." Those are not the conventional terms that we use in English, but they are (or are derived from) English words and their meanings are similar.
Even the made-up words are simple and easy to pronounce. The little desert scavengers that capture R2-D2 are called "jawas." Luke's father and Ben Kenobi were both "Jedi knights" -- and despite the word being used perhaps half a dozen times in the film, kids were pretending to be "Jedi" after seeing the movie a single time. Han Solo's tall, furry companion is a "wookiee." The "sand people" ride "banthas." There's just enough to make the universe depicted in the film feel exotic, but not so much that the viewers' are left trying to remember a long list of terms.
As you noted, the character names are generally very simple as well. Even the alien characters named in the film have unusual-sounding but simple names: Greedo, Jabba the Hutt, Chewbacca.
Compare these to the names given to many of the background aliens 10+ years after the fact by West End Games and novelists: M'iiyoom Onith the H'nemthe (bless you!), Kardue'sai'Malloc, Lirin Car'n, Figrin D'an, Hrchek Kal Fas, Tzizvvt, Kitik Keed'kak.
I do appreciate when world-builders go to the effort to create distinct languages for non-human races; a few years back I was doing some research on constructed languages for the purpose of being able to develop the basics of a couple of languages to add some detail to the campaign world which I was developing. One of my players was nice enough to point out to me that "Chris, nobody cares about that stuff, and we don't even read a lot of the handouts that you give us already."
I still like to ground names of characters and places in the languages of their cultures of origin -- mainly to avoid having a bunch of names that look and sound made-up. None of my players speak any languages other then English (other than a bit of French from high school), so I'll borrow a real-world language to represent other races/cultures. I don't think I ever use foreign terms for anything other than character or location names. People are used to proper names that don't have an obvious meaning, so as long as it isn't too difficult to spell or pronounce, I'll name the cities of the elves by translating a two-word English description into Gaelic or Quenya. The sound and spelling of the translated result is more important for me than the meaning, so I'll modify the meaning until I get a translated word that I like.
If the players need to start keeping a dictionary of terms on the back of their character sheets, then to me that's going too far with the setting fluff. A few players really dig that sort of detail; however, in my experience, 95% of players don't want to be bothered with it. When I'm a player, I don't mind keeping a short list of perhaps half a dozen words to use to add a bit of flavor when speaking in character, but I don't want to have to refer to my glossary to understand what the DM is talking about.