resized by 3x.
adjusted contrast.
added a usm
masked as show all.
darkened eyes and lips in mask.
blurred all on image layer in mask group (eyes and lips wouldnt be affected here)
used a white brush on mask to un-mask some edges, the jewelry and a few highlights in the hair. this shows up stuff on the usm layer beneath the mask layer
copy merge and paste to new layer.
cropped and re-lit the whole using 'illumination' in
psp.
smudged out some artifacting.
basically, your description of 'sharp' and 'smooth' conflict. you cant have both on the same pixel. it's either sharp or it's smooth. but, globally, you can have sharp areas and blurred (smooth) areas. the eyes and almost always left sharp. backgrounds are commonly blurred. so, i used a mix. i sharpened the eyes and lips and also the jewelry and certain edges, like her face edge and some highlights in the hair. also a bit on the hands. the rest i just left with the slight blurring.
you could even add something like a diffuse glow on the blurred parts, if you wanted.