Jim, I've been thinking. In Oz, the word "smart" , in the majority of cases, is used to mean clever in the positive sense, unless it is paired with the word "arse" or the polite variation "pants" as in "smarty pants" which can be negative but can also have a connotation of a reluctant and humourous recognition of someone who has done something clever.

Maybe that's why I didn't see how you could connect "smart" and "smart arsed" when that was not what I was intending. When someone uses the word "smart" I usually think it is a positive usage, unless there are indications otherwise, such as facial expressions, tone of voice or gestures.

The word "smart" can also be used here to mean "well dressed". "You're looking very smart in that business suit." In that sense it can be seen as similar to the word "spruce", which can be a compliment about a person's appearance unless the other clues in the speaker's behaviour and voice indicates otherwise, or the context of the phrase makes it clear.

The lyrics of the song are very clever (that's a compliment, BTW) and they play on words and concepts to create double meanings. Personally, I think the word "spruce" was not chosen randomly, partly because the trees mentioned elsewhere in the song are not named as spruce trees.

That's my opinion on the use of the word "sproose" aka "spruce". I think it was another double entendre in a song which revolves around that concept. But I might be wrong.