Yes, generally it's a bad idea to mix Physics with other movement behaviors. Sometimes they may work fine, but in games like Pinball or Arkanoid this will definitely cause problems.
In Physics you can actually stop objects immediately by setting their velocity to 0. You can even fully control them with only "Set velocity" actions, without forces or impulses.
There is a simple trick you can use - create a clone of the paddle sprite, make it invisible and give it MoveTo or 8direction behavior. Control the PaddleClone sprite, and on every tick set physics velocity of the real Paddle to the PaddleClone speed.