Why can't it be "Az óra kicsi van"?
You don't use "van" when describing what something is like; see the notes for the Basics 1 and Basics 2 skills.
In sentences where A = noun/adjective it's obligatory to omit van and vannak (so only in third person singular and plural). This site explains it well.
Could you please explain when to use and when NOT the verb "VAN"?!!
This is frustrating after some examples!
Az óra VAN kicsi?
No. You don't use "van" in this type of sentence,