Explanations/etymology also appreciated!
For Joe Shmoe, it means a very average or below average person. It’s a derivation of the practice of using “shm-” to dismiss something (eg “Practice shmactice. We’re already perfect”).
And “John Smith” is meant to be the most average name or person imaginable, so they have the “most common” (citation needed) first and last name as well.
I think more generally people use " hr. og fru Jensen" for a more exact analog of “John/Jane Smith”
But Peter Jensen was the most common name in Denmark for many years, so you’re not completely wrong.