Can you use SmartStore when using Hybrid Remote?

Yes, you can use smartstore when running in hybrid remote - I have an application that is based on Visualforce pages with the thinnest of wrappers on the phone, and I am saving user setup information in the smartstore.

The key here is that your Visualforce pages have to include the cordova and smartstore JavaScript files to be able to access the functionality correctly. There's an additional wrinkle if you are using PIN codes too, in that you need to access the smartstore after the user has unlocked the application, otherwise you won't be able to decrypt it.

http://blogs.developerforce.com/developer-relations/2013/04/access-mobile-device-functionality-with-javascript-and-cordova.html

Here is the nice reference ,if you are looking to start.

https://github.com/joshbirk/WarehousePhone

Above github link how to use smartstore in visualforce based applications

<apex:includeScript value="{!$Resource.Cordova}"/>
<apex:includeScript value="{!$Resource.SFHybridApp}"/>
<apex:includeScript value="{!$Resource.SFSmartstorePlugin}"/>//Smartstore plugin in visualforce

Developing an offline app with smartstore visualforce based is definitely possible .An advantage of server based apps is changes reflect instantaneously and there is no need to package or build each time for small change as the change is directly on server .