If you attempt to step inside a tell application [...] end tell structure, the execution may fail since lines will not be sent to the application they are intended to - but to Smile.

To have the lines that you run with ⌘R sent to the application they belong to, you must have the AppleScript terminal target the said application. To that effect, the AppleScript terminal which contains the script being the active window, select the desired application in the Scripting ▸ tell sub-menu. To terminate targeting the application, select Scripting ▸ Logout.

A window which targets an application has its own AppleScript context, it does not share Smile's global context. In particular, variables that you have defined in a regular AppleScript terminal will not be known to an AppleScript terminal which targets an application.