Dragons like parading their young ones around in their treasure. Having the luxury to just throw your belongings at them without feeling the slightest pull of your greed means you are well off. That is the official reason anyway. Though many dragon parents won't admit it, most of them do it because they think it looks adorable.

Some background on her forehead panting: Smolder belongs to the Manta Ray Clan. Almost each dragon belongs to a clan named after an animal you can find in one of the regions where dragons reside. They do not revere these animals, but harming a dragon's clan animal in front of them is a grave insult and a threat that is taken very seriously.