It looks very similar, but keep in mind that ' ŝ ' is a completely separate letter in the Esperanto dictionary and sounds like (sh).
"mouse" is "muso".
"fly" as a creature is "muŝo".
http://esperanto-panorama.net/vortaro/eoen.htm So, in this dictionary "musz" if it existed, would come before "muŝa".
Enjoy the alphabet song in Esperanto: http://www.bing.com/videos/search?q=esperanto+alphabet+song
"moose" is "alko", and that is not so far off when you realize that in Europe a "moose" is called an "elk". http://www.majstro.com/Web/Majstro/bdict.php?gebrTaal=eng&bronTaal=eng&doelTaal=epo&vk=0&teVertalen=moose
It's from French mouche (pronounced like the Esperanto root muŝ-!), which is from Latin musca, which also gave rise to Spanish/Italian/Portuguese mosca.
Yes, it is the diminutive form of the word fly from latin.
Not sure if it would help anyone (and it certainly might be confusing in the long term) but I associated "musxo" with the Japanese "mushi".
That actually does make sense as "insect" is one of the meanings of "mushi" in Japanese. It's a "Small World After ALL!" http://www.kanjijapanese.com/en/dictionary-japanese-english/mushi
Reminds me of the Russian word for fly, Муха (Muĥa in Esperanto, Mukha/Mucha/Muha in English)
"The fly does insect" or "The fly insects" ? Sounds correct for me, but very weird though.