quite hard to tell at times, the reason can be that just to be polite, or it can mean she finds you attractive.
I have noticed from observing others in in public girls will smile sometimes if they find the guy attractive, however the smile does not mean they are looking to get approached or have things lead anywhere. From looking at their body language after the smile it does not usually look like they are hoping to be approached or chatted up.The smile seems to be an involuntary reaction on their part to seeing someone they find attractive.
Don't listen to girls here who say we're just smiling to be polite and it's never nothing more, because I never used to get smiled at by girls at all back before I started working out ......but then it started happening a few times a week after a while, ...so obviously at times the smile isn't 100% platonic in it's origins. I've observed the girls body language and everything and tbh it rarly looked like they expected the smile to lead to something .....hence why i've come to the conclusion I have having considered all the evidence.
In your case.. the fact that you heard her friend say "is that the guy?" would lead me to suspect that perhaps she has been talking about you to them and perhaps she may have a thing for you. If you like her perhaps try and strike up a conversation with her next time or something...