"She smiles happily!"
The english tense is misleading in this case. The "了" indicates the past tense so the the english equivilent should be "smiled happily" not "smiles happily." If you got it wrong because of shoddy translation don't feel bad.
There is no tense in Chinese. The 了 does not make the sentence past tense. It actually has a lot of functions, and doesn't necessarily mean that she smiled happily in the past. It could also imply that there was a change of state because she was not smiling before. Sometimes it is even added just because a one-word verb in Chinese by itself just sounds wrong but not for any inherent reason.
Depending on context the 了 may or may not be necessary. 了 indicates a change, so she is smiling happily whereas she wasn't before. We don't know the context here