If by smart wrapping you mean indented wrapping, yes, it does. Set you preferred wrap mode to Indent in Settins, Preferences, Editing, and then toggle Word Wrap from the View menu.

SciTE, with which Notepad++ shares the scintilla editing component, has quite a few settings for wrapping:

http://www.scintilla.org/SciTEDoc.html

(Search for “wrap” in the page.)

I haven’t looked into how many of those are supported in Notepad++, as I don’t use word wrap myself.