I think it is key to understanding much of the show, too.
The special thing about ponyville is that the ponies there are NOT mean to each other - go to Canterlot, Manehatten, Las Pegasus - mean ponies. Ponyville? exactly ONE mean pony, and it's Spoiled Rich, who doesn't have any friends. Even Silver Tiara finally surrenders to peer pressure and starts being helpful to other ponies.
Yet when Pinkie gets mark-swapped with Fluttershy, Ponyville is full of unhappy ponies that are mean to each other. The smile song shows just how much time and effort Pinkie puts into making sure each pony *individually* is happy, and it's a LOT - almost as much work as Flutters puts into her animal friends.