toss the sticky paper towel in the trash, toss the cake back in the fridge for a bit, rip off a fresh peice of parchment or wax paper grab your fondant smoother and make that frosting do what you want it to 
Definitely use a fondant smoother on the paper towel instead of your hands, makes a world of a difference! The time it takes the icing to become "paper towel" ready depends on the weather that day (for me anyway 
), some days its 10m and others its longer. Give it another shot it does work very well!
It sounds to me like you need a different icing recipe. I don't know where you live, but maybe your icing is not 'setting up'/crusting because of humidity. There are many, many different recipes to try until you find one that works for you.
If your icing has not crusted you can still smooth i cing by using a piece of tulle (netting); lay it on the cake and use a spatula to smooth icing. Yes it leaves a bit of a 'pattern' but most people won't even notice it. HTH
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