His skin is really rather soft, it is just normally protected by armor. It was also not a "dull, worn out arrow". Bard was a very good archer, and he had high quality arrows. Smaug is dead. He fell into the lake. It later mentions being able to see him, "Yet no diver would go down for his diamond armor, because of the dread of the memory of Smaug", or something along those lines. They could see Smaug dead at the bottom of the lake, if my memory serves me properly.
