Question

What is the point of leveling up ditto and smeargle?

Answer 1

By leveling them up, you increase their stats of course. This is very important for Smeargle. It is also important because Ditto needs the stats to either be able to move first and Transform, or survive your opponents attacks.

Answer 2

In the case of Smeargle, it learns Sketch every 10 levels (1, 11, 21 etc) so you can keep levelling it up if you want to sketch several moves (e.g. 4 moves that you want another pokemon to learn).

Even once you have sketched 4 moves you may want to replace one so you can level it up again, replace one move with Sketch and sketch a different move.