The Gabon international was the top scorer in the Bundesliga last season, scoring 31 goals in 32 games.
Schmelzer, who is set to miss the start of the season due to an ankle injury, is delighted to see Aubameyang remain at the club, saying the forward was crucial for Dortmund.
"It is really important that he stays. He was the top scorer of the Bundesliga in the last season. That shows how important he is for the team," the German defender said.
"He is an absolute top striker that we simply need. We always stressed that if he wants that transfer we would understand that, but that we would also be a lot happier if he stays. Now that is the case.
"It is also really important inside the team, because he speaks for example the language of the French players. He speaks several languages and that makes Aubameyang also an important figure that integrates.
"He also brings fun into the team."
Aubameyang has starred in the Bundesliga since his arrival from Saint-Etienne in 2013.
The forward, who has won three cups with Dortmund, has struck 85 league goals in 128 games.