Yes, whenever you block, always hold back.
In fact, in MK and MKII (and I think MK3, but I'm not sure), you should always hold down and back while blocking. There's no reason not to crouch when you are blocking because if you stand, you will be nailed with a leg sweep, but these games didn't have overhead attacks, so there is nothing that will hit you if you are crouch blocking that wouldn't hit you if you were stand blocking.....BUT, there are attacks that will hit you (like leg sweeps) if you are stand blocking and not crouch blocking. So there really is no reason to ever stand block.
If you are holding back and crouch blocking, people who try to throw you will just stand there and punch air. You can throw low attacks at them to get them to back off, but some people have mastered the timing of an uppercut to counter it. When someone is just punching air above your head, they CAN be uppercutted out of it, but the timing is extremely difficult, and I have yet to figure out when exactly you are supposed to do it. People do it against me sometimes, but whenever I try I almost always end up getting punched.
BTW, if you want to be REALLY cheap, you can throw a frozen opponent with Sub-Zero and then immediately freeze the opponent again when they land. This is extremely cheap because it is a glitch in MK....you can actually freeze your opponent when he is in the blocking stance. It's kind of like Raiden. If you are fast enough, you can freeze a Raiden after uppercuting him when he is still materializing and has no opportunity to block or counter.
I have seen noobs come up to me and take advantage of these glitches. Sometimes I will get them by accident, but if I ever freeze a materializing Raiden or a blocking character, I will never hit them because obviously this was not intended to be in the game. If you ever encounter someone who tries to take advantage of these exploits, you should block them.