Today I found out how to map common Mac keyboard shortcuts to work like they should inside iTerm. The ones that I needed most where ⌥← (Option-Left Arrow) to move left one word, ⌥→ (Option-Right Arrow) to move right one word, ⌘← (Command-Left Arrow) to move to the beginning of the line and ⌘→ (Command-Right Arrow) to move to the end of the line.
The process is very simple, you just have to add a few shortcut keys to your profile. Here are the screenshots.
Keyboard Shortcut: ⌥←
Action: Send Escape Sequence
Esc+ b
Keyboard Shortcut: ⌥→
Action: Send Escape Sequence
Esc+ f
Keyboard Shortcut: ⌘←
Action: Send Escape Sequence
Esc+ [H
Keyboard Shortcut: ⌘→
Action: Send Escape Sequence
Esc+ [F
Keyboard Shortcut: ⌘←Delete
Action: Send Hex Code
0x15
Keyboard Shortcut:⌥←Delete
Action: Send Hex Code
0x1B 0x08