How does bronchitis affect the lungs?

Respiratory function: Bronchitis refers to swelling of the bronchi or conductive airway passages. When one breathes, air is transported to the the "alveoli" where oxygen actually enters the blood and co2 is removed. If those initial transport airways become swollen or retain secretions such as mucous, it will require more work to breath. Also air may become "trapped" in the distant airways, impairing breathing.

Inflammation...: Acute bronchitis in caused by an infection in the airways that produces airway inflammation. In chronic bronchitis, a form of copd, the inflammation is caused by cigarette smoke (usually!). Because of the inflammation, patients develop a cough. The common factor is airway inflammation.

Bronchitis: Bronchitis, strictly speaking, is inflammation that is restricted to the bronchial tubes and tubules and doesn't go into the lung tissue unless bronchopneumonia is present.