Perhaps someone with direct experience with publishing to Smugmug will chime in. Short of that, some thoughts on your issues:
Should I not bother to "Save Metadata to File", this seems to be what is messing up the SmugMug publish service?
I very much doubt that it is messing up the publishing. What gets saved to the file from the catalog is independent of what gets exported. Saving metadata to the file is generally a good practice (in case you screw up your catalog backups). Many, perhaps most, users set the preference Catalog Settings > Automatically Write Changes Into XMP.
I would have expected it to behave like an export which would write synonyms, exclude keywords that should be excluded, etc, which seems to work ok in point 6 above.
Yes, that's a reasonable expectation.
You may have done this already, but double-check: Right-click the Smugmug publishing service in the left-hand column of the Library, select Edit Settings, and in the Metadata section verify that you have Include: All Metadata set.
Did you download the Smugmug plugin from Smugmug? You might try this Smugmug plugin instead -- the author designed the publishing architecture of LR and has an excellent reputation.
Are the publish services more effort than they are worth? So I get SmugMug to work, what happens when I try Flickr?
I think many users find the publishing services are generally worthwhile. I publish regularly to Flickr (using the built-in Flickr plugin, which isn't completely reliable) and the Zenfolio plugin from Friedl.
Thank you very much for your response.
I was checking LR where you said to double-check: "Right-click the Smugmug publishing service in the left-hand column of the Library, select Edit Settings, and in the Metadata section verify that you have Include: All Metadata set." In there I found something I almost swear was not there or else I would have previously tried it: "Write Keywords as Lightroom Hierarchy". I had seen that (and tried it) in the regular export dialog boxes, but didn't think that was in the SmugMug plugin. I feel dumb because once I checked this box and republished a picture, all the keywords published to SmugMug as I would have expected.
Again, I would have tried this had I seen it. Thanks again for you help and quick response.