Smell vs No Smell makes no sense

So Neo is a prison that he can't SMELL. Morpheus says so.

However, one of the first things the Orcale asks Neo, has to do with cookies that.. SMELL .. good.

The main reason why Agent Smith hates The Matrix and specifically, being inside of it, is... all together now, SMELL.

So which is it, is Neo in a prison he CAN'T smell, or in a prison he CAN smell?

Not that much in this movie makes any kind of sense, but especially things Morpheus says.

'All I am offering is the truth - nothing more.' Really? Taking Neo basically from a simulated world to a completely different, actually real world in a way that he can't return from it, is NOTHING more than 'truth'? What the..??

'Can't smell or taste or touch'. Why use 'or' twice, when he could've used a comma? Furthermore, why specify 'smell, taste and touch' (see, it's easy), but not sight, sound or temperature? Why not specify wetness or dryness, smoothness or roughess? There's way more to senses than just a simple 'touch'.

Also, why wouldn't Neo be able to smell, taste or touch The Matrix? It's like talking about a city - obviously you can't touch the whole city, but you can touch parts of it just fine. You can smell the streets of New York. You can absolutely taste the grass in the Ueno park in Toukyou (this is the more correct spelling, look at hiragana).

So what gives? We are shown people touching things in The Matrix, we are shown Cypher taste a virtual steak in The Matrix, we are constantly bombarded with how people are able to smell things in The Matrix, so WHAT the F kind of sense does it make to say you can't smell it?

At this point, I am almost convinced that you can just think a movie to making absolutely zero point zero per cent of sense, if you just stop to think about its details one by one.

How can they make movies that make this little sense and have people PAY to be exposed to them? THAT also makes no sense, but one thing at a time.

The only way to fit in this world seem to be to make as little sense as possible, if that makes any sense - and it probably doesn't.