Smoothing goes by your geometry, trying to make your mesh all quads whilst dividing the model. Its a pretty common algorithm used on most 3d apps.

If you want to view a "smoothed" version without adding divisions either soften the normals or convert to sub-d's (although depending on the topology if the model it might add some funkey parts to it.

You can merge all the verts at once, select them all then lower the merge dostance to a really low value (if its too low nothing will merge, if its too high verts in the next row so to speak will merge) bit of a balance but a lot faster than selecting the individual pairs.