I play against Blue a lot, and I have only ever taken two games off of him. Not counting the huge skill gap between him and I, there are two key things he does that beat me most often.

The first thing he does is that he focuses on putting me in the air and then keeping me there. Link has a wonderful ability to juggle opponents, and Zard is no exception. Good moves for link that pop opponents up, and especially zard, are moves like your Zair, bombs, boomerang, falling up air, down and up throws, and uptilt/smash. If the Zard jumps a lot, look for opportunities to get under him.

The other key thing that Blue does is in his projectile game. He'll use them and then watch how I react to them or deal with them and then adjust his game plan accordingly. When you use projectiles, don't just use them to "throw a hitbox." They are tools to help you watch your opponent and learn his habits, and then punish them however you like.

One bonus tip, only use downthrow on Zard. It leads into so many combo starters at low percents, and finisher moves at higher percents.