Revealing mistake: Towards the end when Oz says to Veruca, "You don't wanna find out what I am", and partially turns into a Werewolf. You can tell that both of the actors were filmed separately for the CGI's sake as Oz stands out from the picture more than Veruca does. The same effect is obvious during "Doppelgangland" in season 3 where there are 2 Willows onscreen at once.
Revealing mistake: In the scene when Oz stops the female wolf from attacking Willow, and they both change and Oz tears her neck out, if you look closely, you can see the actor's real skin at the neck.
Chosen answer: Angel is saying that he is still jealous and Buffy recognizes that this is his way of saying he wishes that they could be together. That is why they both smile.