Hannah,
Please see my slides here:http://www.slideshare.net/jdavidhill/marketo-email-reputation-management
And do a search for hard bounces or deliverability here on the Community. Autumn Tyr Salvia has several threads.
What you should do is establish a Master Suppression list that combines several smart lists like Competitors, Email Invalid=True, Marketing Suspend=True, and Bounces.
I think a better restriction for your smart list is to say
1. Include the people you want.
2. exclude anyone who bounced in past 30 days or has email=invalid