I read that in intransitive form sentir can only mean smell, whereas in intransitive form it can mean to feel as well. I think, by adding 'me' we change the context to 'feel'. Google's translation for "I smell good" is "je sens bien" and for "I feel good" is "je me sens bien". I am not sure though if my reasoning is correct here.
Ça va means more «how's it going», so migbt might be a little strange. A better answer that would be "ça va bien" (It's going well)
For an English example, friend 1 says "How's a going," and friend 2 says, "I feel fine now."
It wouldn't be that bad though. If the example didn't seem stange to you, go ahead and use that response.