engage your clutch and push the bike forward & back a few inches - you will hear a clanking sound from the backlash of the clutch gears
when the engine is running with the clutch disengaged, the piston turns the crank when the plug fires, while the crank pushes the piston beween firings
with the clutch engaged and riding at speed, the weight of the rider causes the momentum of the rear wheel to push the piston faster than the crank does - this takes up the slack in the gearing, such that at higher revs you hear that backlash clank a lot at a rapid tempo
this is not something to worry about
as far as the smell goes, look for wires, muffler paint, or your pant leg getting burned by the heat of the muffler