You can use the Simplify Polygon Tool to get rid of the zickzack boundaries. Activate the "Resolve topological errors" function to avoid topological errors. Unfortunately the Smooth Polygon Tool doesn´t offer that funtion (yet?). The result is not perfect, but will be improved, and the file size will be much smaller because you get rid of many unnecessary points.
Hope that helps. Keep in touch, if you find a better solution.
Another option could be to ENVY Ex instead of ArcGIS. I got pretty good results with that.