I'm sure every researcher has been in your shoes at least once. It's frustrating knowing that someone was living but they don't appear in the census. That's happened to me numerous times.
I'm sure there are several reasons why someone wasn't recorded. They may have been traveling, moving, or just not home at the time the census taker came around (I'm not sure if the census takers went around more than once to try and capture people who were missed the first time).
I've had several occasions myself where the person's surname was transcribed or misspelled so badly that the soundex feature didn't even work and I had to resort to reading the entire census.
It's especially problematic when the first letter of their surname was transcribed incorrectly. I've seen instances where the letters "L" and "S" (among others) were mistaken for each other. There's no way the soundex feature is going to help when that happens.
My great grandmother's surname HOSFORD was transcribed as BOSFORD on a census. When I couldn't find her under Hosford, I searched just using her first name. Of course there were hundreds of hits, but fortunately I only had to read up to the B's to find her!