is there really an accent on the 'u' on ou?
Yes. It doesn't change the pronounciation, its purpose is to disambiguate from the word 'ou' which means 'or'. Same thing for 'a' (has) and 'à' (to/at).
Is moustique an acceptable synonym for mouche?
No, "un moustique" is a mosquito.
What is wrong with "Où se trouve la mouche"?