2 of 2 adding the point o Agent Smith taking over other people

I think a lot of answer here are right :

/ First, Neo was a bait, so it would have been pointless to take him over before he meets Morpheus

/ After meeting Morpheus, he was no longer "takable" because no longer connect to the matrix.

But I would add that taking over a human (by a Agent) is not standard procedure : in the movies, it only happens in a crisis situation. Maybe it means the loss of a human, and the point of the Matrix is keeping humains alive, so from a computer point of view, the pros must be superior to the cons. It's like a escalation privilege : you don't do it if you could avoid it.

So it's much more normal procedure to plant a bug into a human (that could be easily erased from his memory and vanish like a dream) rather than take over his full body.

I would add that taking over bodies is precisely what Agent Smith does to challenge the Matrix and take control of it, so it shows that taking over bodies could be, by essence, dangerous and affects its very structure of the Matrix.