Don't expect BLAST to produce the best
available alignment. BLAST is a heuristic method which does not
guarantee the best results, and therefore you cannot rely on BLAST if
you wish to find all the hits in the database.
What you cannot get out of BLAST
Instead, use the Smith-Waterman algorithm for obtaining the best possible local alignments [Smith and Waterman, 1981].
BLAST only makes local alignments. This means that a great but short hit in another sequence may not at all be related to the query sequence even though the sequences align well in a small region. It may be a domain or similar.
It is always a good idea to be cautious of the material in the database. For instance, the sequences may be wrongly annotated; hypothetical proteins are often simple translations of a found ORF on a sequenced nucleotide sequence and may not represent a true protein.
Don't expect to see the best result using the default settings. As described above, the settings should be adjusted according to the what kind of query sequence is used, and what kind of results you want. It is a good idea to perform the same BLAST search with different settings to get an idea of how they work. There is not a final answer on how to adjust the settings for your particular sequence.