Global demand for underground gas storage (UGS) is steadily increasing, with the limestone-based UGS system situated in the Sichuan Basin of China gathering considerable interest in recent years. However, studies focusing on the fundamental mechanisms of the injection-production process in these systems are limited. Moreover, existing studies utilizing physical experimental methods frequently fall short in effectively visualizing micro-flow or incorporating real core samples from the reservoir. To address these gaps, we performed a coreflood experiment, integrating micro-Computed Tomography (CT) scanning to investigate mechanisms of fluid flow and storage capacity during the injection and production cycles in limestone reservoirs. Our approach involved utilizing core plugs with artificially engraved fracture-vuggy structures, which mimic the characteristics of the reservoir. Micro-CT scans were performed to visualize the microscopic changes in fractured-vuggy structures and the distribution of irreducible water during each cycle. This study reveals that increased cycles correspondingly affect gas storage capacity, particularly by expanding it in relative larger vuggy structures while reducing it in finer fissure network structures. The amount of irreducible water decreases after injection-production cycles, likely being expelled alongside the extracted dry gas. This plays a critical role in expanding the storage capacity in larger vuggy systems. Conversely, there is a decrease in storage capacity within fissure network systems, as the irreducible water is replaced by gas. This leads to a reduction in the opening force of the fine conduit. The dense matrix has a very limited effect on the flow mechanism and its influence on storage capacity. Overall, these findings offer practical insights for optimizing injection and production strategies in limestone UGS systems within the Sichuan Basin, contributing to a deeper understanding and efficient utilization of this vital infrastructure.