This status bar is going to be the most important thing you have in your village. The higher your level goes, the more difficult (i.e. the more XP is required) to get to the next level. It also shows the total of your Smurfs living in the village. If Papa Smurf (or someone else) sends Smurfs away for a quest they will be removed from the number of Smurfs available to work.
The total number of Smurfs living in the village (that is the second counter in the Smurf count) equals the number of crop fields, flower pots and shrubs (or trees) you can have in your village as total.
If you have reached the maximum level, that means if there is no new level available at the moment, the status bar will say “Max” instead of your current status on the way to the next level. As soon as a new level is added with a new update of the game, the status bar will again show your percentage and not say “Max.” anymore. All the XP you gain while being on the maximum level is still counted in will increase (or jump ahead) once a new level has been added.
That means nothing you do is in vain, not even collecting XP while having reached the last available level at the moment.