I am trying to restrict MySQL 3306 port on a linux machine from making any connections to anything other than localhost to prevent outside attacks. i have the following code, i
iptables -A INPUT -p tcp --dport 3306 -s 127.0.0.1 -d 127.0.0.1 -j ACCEPT
The above rule is for converting two lines into single one.
Answer to your second question:
If you do not want to provide mysql access from other than localhost, then it is perfect to configure this way. Simple. :-)