Can't ssh as tty-less user
Solution 1:
The problem doesn't actually seem to be that it's trying to read the passphrase--that's just a warning. Rather, it's trying to do host key verification but failing. If you really want it to never ask about host keys, consider adding the following options to the ssh command line:
-o StrictHostKeyChecking=no -o UserKnownHostsFile=/dev/null -o GlobalKnownHostsFile=/dev/null
Note that there may be security implications, so make sure to read about these options in the ssh_config
man page.
EDIT: Given your updated error messages, it looks like you have a corrupted identity file (or as cjc pointed out, it might be in the wrong format). Try creating a new one manually with ssh-keygen, and add it to the server's authorized_keys.