First of all: really cool that you got to meet The Beach Boys and that you saw them live in the 60s!
I'm not too sure if 'Smile' would have been such a huge success if it would've been released in 1967. Even 'Pet Sounds', which was a much more accessible album (including four hit singles) than 'Smile' would have been, was a relative commercial failure by Beach Boys standards. And 'Heroes and Villains', easily the most commercial one of all the 'Smile' songs, more or less flopped as a single.
That's a hard call, Joost. There were a lot of things that prevented "Pet Sounds" from being a commercial success. The Beach Boys were competing against themselves with the release of "Summer Days" shortly before the release of PS. Capitol Records didn't promote PS, which made no sense since it was the most expensive record to produce (in those days). All of the singles from the album sold well, except for "Caroline, No", which was released as a Brian Wilson single. But the album DID make it to #10 on the American charts.
As for "Smile", Brian Wilson had the tremendous respect of the recording industry in those years. "Smile" was legendary before its release. If it had
been released AND if the Beach Boys had
appeared at the Monterey Pop Festival, I think it would have been well received. But to pull it off, they would have needed to include sidemen on stage, something they had not done up to that point.