Using irony in a narrative can serve multiple purposes, but the most prominent effect is often to create humor. Irony occurs when there is a discrepancy between expectation and reality, which can lead to amusing or thought-provoking situations.
Additionally, irony can also serve to highlight character traits, deepen themes, and create tension within the story. While it can contribute to the description of settings or the introduction of characters, its primary function is typically more aligned with humor and commentary on the contrasts and complexities of life.
So, while all the options you provided can be influenced by the use of irony to some extent, the most direct effect is to create humor.