Am I right in thinking televisions need to be 'smart' in order to run an OS, televisions need to run an OS to run apps therefore we need 'smart' TVs in order to rid ourselves of these 'set top' boxes?
Sure. Or, alternatively, you can buy a big reliable dumb TV and upgrade the set top boxes (TiVo, Roku, AppleTV, Android-whatever) cheaply every couple of years.
Even better, have the set top box as a device you control, such as raspberry pi running Kodi, so the software is flexible and less likely to become horribly obsolete. Not a solution for the mass market however, due to the setup work involved.
I don't think so. Even a dumb TV can have an OS controlling the program and channel settings, or respond to commands from the remote. Set-top boxes generally aren't any smarter than a dumb TV, so you don't need it for that either.
What we call "smart" are simply TVs that have a general-purpose OS, indeed to run apps. That doesn't have anything to do with TV viewing, but with fragmentation of the delivery landscape: with the current appification, every video outlet considers your TV to be part of their "user experience" and wants to control and monetize your TV.
Or use the TV as a dumb monitor connected to something like a Chromecast. I understand why the TV manufacturers probably hate this model, but as a user, sending content from a tablet to a TV seems just about ideal.