I started Ah playing on a 56K dial-up for about 4 years. I then moved, and had a 28K dial-up connection. I've now been upgraded (after another 3 years) to a DSL connection.
My hit% on 56K was horrid, but I was a "beginner". My % increased over time. As I moved to 28K dial-up, my hit% continued to increase, even though my connection was only 1/2 as fast...
Now on DSL it's still slowly improving, but I've seen zero difference in hit% due to my connection speed.
I had lots of lag and warping issues at first, until I dialed in my computer and dial-up settings. Following that, I seldom saw any game difference between playing at my house or a friends house, even though he had/has high-speed. Of course, it only took him a few minutes to download the updates, where it took me as many as 13 hours... I was often better off to call him and have him burn the updates on a disc, so I could drive 1 hour each way and pick up the disc...
So- I doubt you'r hit% is suffering due to connection. As hammer mentioned, the game registers the effect of your shots based on your end, and transmits those effects to the other player. If you see hits, he takes hits- it just may take him a bit longer to realize it.
I've never paid any attention to ground attack hit% though- so my post is referring only to fighter air/air hit %.