Hi Bob,
Sure. The reason it is trying to use smtp settings from site settings instead of directly from web.config/user.config is because you have this setting set to true:
<add key="EnableSiteSettingsSmtpSettings" value="true" />
if you set it to false then it will not try to load them from the database but will use them from the user.config file. That should eliminate the error in site settings but its probably also a good idea to clear out those fields in the db since they cannot be decrypted.
UPDATE mp_SiteSettingsEx
SET KeyValue = ''
WHERE KeyName = 'SMTPUser' OR KeyName = 'SMTPPassword'
Generally since smtp settings are a set and forget kind of thing I recommend just use user.config instead of making it editable as site settings from the UI. For multi site installations where you want to have different smtp settings per site then the site settings approach can be helpful.
Hope that helps,
Joe