Elliott Smith's first two albums were almost completely guitar and voice, with a few minimal instruments in support. For his third album, he started to evolve his sound to include more instrumentation. For his fourth, he really embraced a fuller sound, especially writing for a band again. (He started out in a band in the early '90s only to go solo when his independent work became so popular.) He also went out of his way to write music with a bit more brightness, if only a bit more.
This is where "Baby Britain" fits in his evolution.
Smith was a Beatles fan - apt with his John-esque kind of voice. And the more instrumentation he brought into songs, the more I think he tended to emulate the Beatles. "Baby Britain" has the feel of "Getting Better," chiming, chopping guitars and all.
Even with a broader sound, there is a commitment to minimalism. The singing melody is the star, and the chord structure is clearly labored over but not embellished; the extra instruments do their simple jobs nicely.
For someone suffering from hard drug and alcohol addiction and possibly scarred from child abuse underneath it all, a song that seems to make fun of an alcoholic kind of counts as lightening up.