Are you asking about the English sentence or the Spanish one? The way I use English, using the word 'does' in this already affirmative sentence adds an extra point of emphasis. I'm not sure if this is regional or universal among English speakers. I wouldn't add 'does' in the affirmative unless you knew it was for extra emphasis or a response to a question.
In Spanish, if you do want to (I had to do it :) add an emphasis in the same way, you can sometimes insert the word 'sí' in the same way. 'Eso sí me afecta mucho.' It's unnecessary, just like 'does' in your sentence, but it adds an extra affirmative feel to an already affirmative sentence.
That affects me much definitely wouldn't be used in English usage - it would be 'that affects me a lot' or 'that affects me very much / so much' - without the so or very it doesn't sound right which would suggest to me that it's either grammatically incorrect, or has fallen out of use.