Continuity mistake: Buffy gets a massive scar on her head from fighting with Adam. This scar changes size at least twice throughout the rest of the episode.
Revealing mistake: After Buffy leaves the cave where Adam kills Forrest, she trips and falls down a horizontal slope. She then rolls over some rocks and one of the rocks wobbles.
Chosen answer: Angel is saying that he is still jealous and Buffy recognizes that this is his way of saying he wishes that they could be together. That is why they both smile.