I think I use the past form when what I wish for are actions that are either on-going or repeated.I wish he stopped smoking.
I think that's right - both your sentences can be followed by "but he doesn't" or "but it doesn't" etc. As such I think it would only work with smoking if the stopping was repetitive, as you say. For example "I wish he stopped smoking when my mother was in the room, but he never does".This sounds very strange to me:
I think I use the past form when what I wish for are actions that are either on-going or repeated.I wish Michael Jordon lived next door.But stopping smoking is a one-time thing ~ presumably ~ so it sounds strange to me to use that structure to express a wish that someone stop smoking. [I would not understand "I wish he stopped smoking" as a wish that he made a regular habit of stopping smoking unless there was some elaborate context to support that interpretation.]
I wish the 4th of July parade went down my street.