A song will be in a specific Smart Playlist because it meets the rules of that playlist. A Smart Playlist that's intended to find only songs that are marked by iTunes as original file not found may include songs that are on your computer, but that doesn't mean that iTunes knows where they are located.
To hopefully sort out the issue you've identified ("missing songs" and duplicates), try the following:
- identify the two entries in iTunes for a song that iTunes says it cannot find
- if the song has an exclamation mark to the left of the title, that means iTunes cannot find the file for that song. Highlight it and use right-click/Song Info from the pop up menu (or Edit/Song Info on the top bar menu). You will see a pane similar to the one shown below:

- tap No and on the panel that opens, select the File tab (2.) and look for the location field (3.):

- in the screenshot above, the location is listed as being on the D drive, while the filename is 03 Tom's Diner (A Cappela).m4a
- look at the screenshot showing the location for that file and note the difference in the filename:

- that leading x is why iTunes cannot find the file; the filename is different.
Remember though, that the filename itself may still be correct but the file might be in a very different folder, in which case the file may not be found using this method
- if the file is not found, you may have to use the Windows Explorer Search feature to search for the file
- If you find two entries for a song, but only one plays, find the erroneous entry in iTunes and delete it from iTunes
- If you find two entries for a song and both play, check (using the method above) the location for each entry. If both entries are looking at the same location, choose (in iTunes) one for deletion, but make sure not to delete the file itself. If or when you see the message asking if you wish to move the selected song to the recycle bin, make sure to tap the Keep File option. If you delete the file, then the other entry will become unplayable:

Post back to let us know how you get on and also if you require any more information or help.