Why do Martin guitars smell so good?

You got it - it's the mix of really good solid tone woods... and a very well-applied finish. Inexpensive guitars are made from "laminated" wood - in other words - Plywood. Plywood has none of the aroma of real solid tone woods. The other thing a really good guitar will give you that no inexpensive guitar can match is "feel" - even if the two sound exactly the same... the guitar built from solid tone wood will feel like it's alive in your hands - and that tactile feedback is just as important as the sound IMO