Play area has smooth hollow (7)
I believe the answer is:
sandpit
'play area' is the definition.
(I've seen this before)
'smooth hollow' is the wordplay.
'smooth' becomes 'sand' (sanding is a kind of smoothing).
'hollow' becomes 'pit' (pit is a kind of hollow).
'sand'+'pit'='SANDPIT'
'has' acts as a link.
(Other definitions for sandpit that I've seen before include "Site of castle perhaps" , "Play area for small children" , "area for kids to play in" , "Playground feature" , "Play area; quarry" .)