She was always smiling as a baby so they called her Smiley and then dropped the S when she got older. Then she legally changed it and adopted her dad's middle name.
Miley has said that she wants to focus on movies moreso than music and that this album (Can't Be Tamed) would be her last for a while. However, Miley sells out nearly all her tours and that's where she is most profitable. CD sales make up very little revenue but tours can generate millions of dollars. Miley will make more money for Disney as a music artist than an actress, so I don't see them letting her lose the music career any time soon.
As for the whole Christian thing, that is such a farce. I'm pretty sure the story is that Tish was one of Billy Ray's groupies that he knocked up. In fact, he got 2 women pregnant around the same time and ended up choosing Tish (the other kid is financially supported by Billy Ray but is not really part of the family and spends very little time with them). The Cyrus family is not a good example of morals and solid family values.