If you scale an image so it's twice the size, the computer copies each pixel twice over (so the numbers 10110 become 1100111100) but the image becomes noticeably more grainy and pixelated in the process. That's one of the main drawbacks of using raster graphics: they don't scale up to...
But he explains the Smart object briefly as rather than a rendered raster file it is a raster file with the raw file embedded inside of it so that Photoshop can (in my words) give you access to the raw data. His explanation is only about one paragraph...
Figure 1 from paper (vector graphics used in paper, raster above). The task we solve is to extract the meaning (c) written in format (iii) of sentences (i). Full description of Figure (in higher quality vector graphics as well) is in the paper. Full Abstract Humans rapidly generalize ...