Can i batch process a smart layer using a spreadsheet info?

No, data sets or data-driven graphics cannot be applied to Smart Object layers, as already stated. The best option is probably a script if you can write it or find someone who is capable of writing it for you. Involving data sets is probably possible, but that will require you to export 1000 data sets as separate files and then run a batch to replace smart object content. That’s the only way that comes to mind at the moment. You must pay attention to making replacement layers or documents the same in size as the type layer in the parent document. It’s a bit complicated and needs more testing of what I did.

Not that I'm aware of using native features during the merge/creation of the text variables (possibly scripting could do so, but it would be very complex).

Variables predate smart objects.

After running the variables to create the separate 1000 text layer docs, an action or script could then work with the text layer to combine it into the smart object and re-save the PSD.

A script could do this without having to mess with Photoshop Variables/Data Driven Graphics.