You can completely miss them, and if you leave it for too long they get executed by the terrorists I believe. Rescuing hostages was always a secondary objective, the primary one was retrieving the Aug prototype. As long as that happens you got the job done, although if you
or let the hostages die you get chewed out by various people.
I got Free Portal Syndrome with this one where I had a great deal of trouble finding someone who wanted it and didn't already own it. Did eventually find someone though, lol.
Yes, that's what I did. Prichard mocked me for it, too.