As requested :

Red, White and Blue Squadron were administrative distinction, dating back to the elizabethan time, when they designated centre, rear and advance squadron of the - then -unique English Fleet.

By Napoleonic time, they were used to define precedence between admirals, vice-admirals and rear-admirals (and this was also honorific, since precedence was based on seniority from the nomination as captain on).

At operational level, squadron designated a fraction of a fleet, from light squadron of two frigates and up, to blockade force of several SoL : Baltic Squadron of Saumarez in 1808, under direct order of the Admiralty, was of up to 11 SoL, and divided into three squadron under rear-admirals Keats in the Sound, Samuel Hood observing Kronstadt, and Bertie in the Belt.

Squadrons could be commanded by Captain, nominated Commodore for the duration of their mission, or by Admirals. Fleet could only be commanded by Admirals.

By the time of Lisbon blockade, S.Smith was rear-admiral and had 9 SoL, (Marlborough, London, Bedford, Foudroyant, Conqueror, Plantaganet, and 3 more) to counter the Portuguese Fleet of 8 SoL. Coming back from Brazil with 2 SoL less, he was reinforced in front of Lisbon by 4 SoL more (Ganges, Defence, Alfred, Ruby and Agamemnon), when hostility of Russia became clear.
Thus this operation was classified as "Fleet action" in Jame's history, rather than "Light squadron".

A rather large force for a rear-admiral, whose rank and seniority made junior to at least 90 other rear-, vice- and full- admirals. And a rather large mission, to rally, seize or destroy a fleet of 8 SoL in fortified harbour (despite the poor condition of both Portuguese and Russian ships).

I would be rather sceptical of the role of S.Smith in the negotiation with Portuguese Court, when a full diplomat was on the spot, and negotiated with the Court since long before the crisis. But you know, "les super-héros peuvent voler"

Source : James'Naval History of Great Britain, available online.
Steel's Navy list of 1814 (list of 1810 is available on paper, but not online).