In general, it comes down to exactly what is going on and what the intention of the perpetrator is.
Grooming laws apply if there's an intent ot lure the child into a sexual act. You mention "smut", which implies that the role playing itself may include some form of sexual aspect, so there's a couple of ways to look at it:
1. If the role playing includes sexual aspects, simulated or not, then pornography laws apply and grooming laws would likely apply.
2. If there is no sexual aspects in the role playing, then it comes down to what the perpetrator's intentions are. If those intentions are to lure the child into performing a sexual act, grooming laws apply. Once the child performs a sexual act online, simulated or not, pornography laws apply.
The laws apply based on the age of the child involved as follows:
Child Grooming:
TAS: under 17yo;
Commonwealth, all other States and Territories: under 16yo.
Child Pornography **:
ACT, NSW, QLD, WA: under 16yo;
SA: under 17yo;
Commonwealth, NT, TAS, VIC: under 18yo;
** Based on laws related to "production" of child pornography. It's possible that other age groups may be applicable in relation to "possession" of such material.
Ref (Last updated 2017):
Online child grooming laws
Ref (Last updated 2015):
Child pornography offences: Production