. 은/는 is a "tag" particle helping to categorize a topic of discussion. It's not a marker like 이/가, 을/를, 에/에서 etc., used to identify the role of the attached noun (subject, object, position etc.). . 은/는 in fact can be tagged to any if not all of the markers and even to final verbs. . As markers do tend to get omitted in Korean sentences if their roles are clear from the sentence, 은/는 often gets misinterpreted as the alternative of those markers. They are not. They are "tags" (as much as the # in social media).
Back to your question: 나는 vs. 나의. The difference is only in the context.
. Your answer:
나의 후각이 안 좋아요 should be accepted as an alternative, in a reverse translation. But it should be understood as a plain, one-off statement.
The given example however,
나는 후각이 안 좋아요 can literally be translated as: Speaking for myself, the sense of smell (mine) is not good. (= My sense of smell is not good).
Here 는- helps to set a category for discussion which is 나 (I, the Speaker) and gets the discussion started with the sense of smell...
I'm not a fan of overly literal translations but in this case I feel you're also changing the semantics. "Not thin" is different to "fat" and so are "not good" and "bad" even though the logic is the same, logic is not the only factor. And in this case we don't have to do strange things to the English sentence to maintain the "not good" part. So to me it's more important that it's more accurate and not that it's more literal.