Interpretation of principal ideals in localisations of an order

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I'm reading about orders and invertible ideals, but I'm having a little trouble connecting a few different concepts.

In a Dedekind domain, all ideals are invertible, and they correspond to divisors in algebraic geometry, which in turn are formal sums of codimension 1 irreducible subvarieties. But in an order, an ideal $\mathfrak{a}$ is invertible iff all the localisations $\mathfrak{a}_{\mathcal{p}}$ are principal.

My two questions are:

  1. What is the significance of an invertible ideal of an order. It seems that even non-invertible ideals would define a subvariety, so why exclude them? I see that it is necessary to do this in order to form the class group, but there must be some more intuitive reason...
  2. Do principal ideals correspond in some way to smooth points? I understand that a DVR defines a smooth local neighborhood of a point, and a singularity in an order is a point where the local ring is not a PID, but at these points, what is the difference between the principal and non-principal ideals?

Thanks in advance!