Learn Swedish: Flugan är liten men mycket irriterande. - The fly is small but very annoying.

Because it ends in -ande. Words with this ending are present participles (like English words ending in '-ing') acting as adjectives. In Swedish, these adjectives are invariable. This means irriterande will never change its ending, whether it is describing an en-word, an ett-word, or a plural noun.

How does the adjective irriterande behave differently from liten in this sentence?

Liten is a normal adjective, so it changes to match the noun. Here it takes the en-word form to match flugan. If we talked about an ett-word like biet (the bee), it would be litet, and for plurals, små. But irriterande is invariable, so it stays exactly the same in all those situations.

What verb does irriterande come from?

It comes from the verb att irritera, which means to annoy or to irritate. Adding the -ande suffix to the verb turns it into the descriptive adjective we see here.

Does mycket always mean 'very'? I thought it meant 'much' or 'a lot'.

You are right that mycket often means 'much' or 'a lot'. However, when you put it directly in front of an adjective like irriterande, it acts as an intensifier meaning 'very'. You could also use the word väldigt here with the exact same meaning.