I’m able to create a circle, then scale into an oval, but when I try to scale portions of the oval to create less curves on the top and bottom of the shape then it causes sharp corners at the edge of the section that I’m scaling.
What version of SketchUp are you actually using? Your profile says 2018 Make which is not possible. If you are using a Desktop version you could use a Bezier curve instead of the 2-point Arc tool. That would avoid the hard corners.