I'm not sure if your guy just checked the exhaust by visual inspection.. A smoke test is a small machine that produces smoke and you place a feed pipe from the machine into one of the hoses of the engine and smoke will leak though any damaged hoses..
Lambda sencer is easy to do.. it looks like a spark plug.. take that out and follow the wire and carefully unclipped that and replace with new one.. senor is about £96 for a decent one and then clear the codes and the light will go out from the dash
Put in a full bottle of fuel jet cleaner to your half tank of fuel and repeat process. that will help..
I'm would guess your throttle body will be needing cleaned as well. Carefully remove and clean.
The problem you have are all due to carbon build up and are very common when the car reaches a serton age..
One more thing go on the motor and sit in 4th gear at 3000 revs about 70mph and for 15 minutes and you'll burn off some of the carbon in the cat.. repeat following day..
Don't worry all those things are due to carbon build up.