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My iphone 5 fell around 40ft down a stairwell, the screen got smashed and the touchscreen hardware appears to have partially popped out. The phone still works, but it has a very strong smell. Should I be concerned?

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Yes - moderate concern is warranted. Even from a fall from 3 feet / 1 meter, the lithium battery could get damaged and overheat and cause plastic to melt. A wire or board could short circuit as well. Worst case, you have a fire that ignites and releases not safe for human smoke and chemicals in addition to the idea you have a fire where you don't want one.

Your drop was so far, it’s amazing anything works so please get it checked out or take immediate steps to prevent a fire.

If you can power it off and disconnect from any charger, that would let you know if it cools off and stops making odors. I would probably keep it in a safe place if you can't watch it or get it to someone that knows electronics / repairs iPhones.

It could be coincidence and nothing, but I'd rather not risk it not being able to see pictures or know what may have moved / broken inside.

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