I must have missed the part of Wealth of Nations that you're citing. Because when I read it, Smith defined "wealth" only in aggregate, as the "net revenues" of the labor of a society. So ignoring, for the moment, the fact that Adam Smith's definition of "wealth" isn't the only one (and the fact that you're using the terms "wealth" and "value" interchangeably), I think you've misinterpreted what he wrote.

In other words, you're really stretching to use his notion of "wealth" as an argument that trade creates more wealth. Wealth generation does not occur when an item is traded -- it occurs when an item is created, using labor. Smith goes out of his way to say this:

"The value of any commodity, ... to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities" (Wealth of Nations, Book 1, chapter V)

The peanuts in your example didn't gain or lose value when they were traded for a paperback. Nor did the paperback gain or lose value. We merely created a market that defined their values as equivalent. Confusing this process for wealth creation is a big reason why we're in the economic mess that we're in today.