Making a Smoother Curves with Two Off-curve points
It helps to use a diagonal guideline at a tangent to the curve before deleting any points. Select the two extreme points on the curve, press G to create the diagonal guide, then drag it to touch the curve. Here I have copied the guide to show the process more clearly.
Below you can see how I edit a bold italic lowercase o.
There are six intermediate points. Two is enough to get a smooth
so I delete all but two of them, convert them to on-curve points and move them to the diagonal, horizontally or vertically in line with the curve's extreme points.
All I need to do now is convert them back to off-curve points
and the curve touches the tangent again.
Note the different angle of the tangent to the outside curve of the o.
You can also create diagonal guides by dragging a vertical guide,
rotating it with the shift key to the desired angle and dragging it into position.