The answer is: yes and no. You can catch fish without knowing much about entomology... I knew zippo when I started and I caught trout. I bought my flies at a Payless and picked ones that looked interesting. I figured the ones with hackles that stuck up were probably dry flies but I didn't buy them with any bug in mind. As I originally spin fished with my family and one of the first articles I read in regards to flyfishing indicated 80% of what a fish eats is subsurface so I didn't start with a dry line... I bought a sink-tip instead.
I was more interested in catching fish than catching fish with specific flies so it was many months later before I bought a dry line.
I had no idea what I was doing but picked patterns that looked buggy to me -- and I figured they probably sunk. The tactic of buying flies at Payless worked because they only stocked the most common flies that caught fish. One in particular worked quite well and it was many moons before I discovered it was a Gold Ribbed Hares Ear.
Once I finally bought a dry line, I picked flies that I thought would float and again, went with what looked good to me. It turns out I picked a Royal Coachman and an Adams... yup, they worked.
Then I joined a fly club and started fishing with guys who had knowledge of entomology -- fact is, one (Rocky) was a micro biologist who at one time decided between entomology and microbiology as what he wanted as a career. He was attending the same entomology classes at OSU as did Hughes and Hafele.
Turns out that the guys I met at the fly club ended up lifelong fishing buddies. Rocky was our bug guy. As he took the same classes as Dave and Rick, he knew as much as they did when they wrote their book -- which I highly recommend.
Rocky was responsible for my interest in bugs. I was fascinated by the critters. Once I had a basic knowledge of what bugs trout were eating, this changed my flyfishing strategies considerably. One thing lead to another and I started writing articles in regards to flyfishing... it helped to have Rocky explain the different stages of aquatic insects. I set up an aquarium in my garage and Rocky and I started collecting nymphs from the same little creek where the entomology students collected bugs for the classes. The longer I lived the life of a fly angler, the more I learned about bugs.
Did this knowledge help me catch larger trout on our home waters of the Metolius? No, but the knowledge did help our gang catch trout when others caught nothing.
So, I did get into the world of aquatic insects fairly heavily but primarily for my articles.
Then it got complicated. As I was in the sport to catch fish and not any specific method for catching those fish, I started venturing away from "matching the hatch" or even matching a bug. I used my knowledge of entomology to deviate from bugs and start using baitfish patterns (streamers) for larger trout. Plus, the fact that some patterns do not look like any real bug -- attractors-- sometimes worked much better than those that did represent specific bugs. Some of the largest trout I caught were with patterns that didn't really represent a genuine bug or even a baitfish.
I started venturing away from just catching trout in rivers and this meant I had to learn additional bugs that fish eat in stillwaters. But I found that using "lures" such as Woolly Buggers worked damned well and they didn't look like anything on this planet. Then I got into bass and the bug approach was tossed out the window. I started chasing steelhead, salmon, shad and SRC and again, the bug approach was not the best way to go. I took up saltwater fishing and obviously the knowledge of entomology will do you know good when fishing in saltwater.
So, that's the reason I answered "yes and no". It depends on where you are fishing and what you're fishing for. Sometimes a basic knowledge of the life and times of aquatic insects is important... sometimes it doesn't matter in the least.
I study what different species of fish want to eat. Like I said, my goal is to fool fish into eating whatever I've tied at the end up my tippet material. Sometimes this means using a bug pattern that represents what the fish are accustomed to eating and sometimes it may be something completely different.
That said, I love the knowledge I have of entomology but it really is just enough to get me by. I've never found it necessary to know the exact dead language name of a bug but it helps me choose a pattern if I at least know the stage of life, the size, the color and if it's a mayfly, caddis, stonefly, terrestrial, midge, damsel, ect, for picking a pattern. I leave the dead language stuff to Rocky
You really don't need to become an ACE at aquatic entomology to catch fish or even catch larger fish with fly gear, but the bug knowledge is an addition to flyfishing that I and many others enjoy... which explains why I have so many aquatic entomology books in my bookcase. If nothing else, knowledge of aquatic entomology certainly won't hurt you with your flyfishing endeavors so there's no reason not to have a basic knowledge of the life and times of bugs that many fish eat.
Oh, in addition to the books mentioned above, you may want to pick up a copy of
Bug Water by Arlen Thomason from Springfield, Oregon. It's a fairly new book (published in 2010) and the macro photography of the insects is fantastic!