What is surprising is that the foul words were borrowed from Arabic, and not Yiddish or any of the other languages commonly spoken by the Jews who settled in Israel.
There's a decent selection of biblical foul words to use, by the way, and many are in use.
And the reference to a penis is interesting in its own way - at least three times in the last 200 years, a new "safe" reference, and the reference took over as the improper foul word. The one in the last 50 years is literally equivalent to "the f" (as in, "the f word") was spawned verbs equivalent to "I will f you" -- the emerging noun, "זיון", is pronounced exactly the same as the f*cking Microsoft iPod competitor.
The main differences I can think of is that Hebrew doesn't go quite as crazy with broken plurals, there's no diglossia, and of course the writing system isn't so pretty.
The structure of the language and it's grammar rules has not changed. Even though the language was not used for regular conversation, it was still studied and spoken for the entire time, so was never lost.