The olfactory system is another way our brains provides information about ourselves and the world around us. We are able to descern danger (such as the smell of the fire) and also enjoy daily experiences through our food, environment, as well as friends and family.
Think back to the last time you had a cold. Did the world seem more bland? When your sense of smell is dampened by a cold or even an allergy, you aren't recieving important information which adds to your expierence of daily life.
Additionally, having your child be able to explain different smells throughout the day adds to imagination and language development. A rich smell life will help your children grow in wonderful ways!