It seems that when you mean "A is more X than B" with the formula AのほうがBよりX, ほうが is completely a fixed element in this idiom and not replaceable with は. The argument Bより, however, can be followed by an extra topic particle: ～よりは, ～よりも. Alternatively, using another noun instead of ほう will make the sentence valid, such as:
I'm not sure how to best answer your question, but here goes:
is it generally allowed to use は within an indirect quote?
Yes, you can use は in indirect quotes. Although, I might be misunderstanding what you mean by "indirect quote", because I don't think it's always possible to determine if a quote is direct/indirect.
My dad said smartphones are ...