Qantas allows you to use your points whenever you want (it just costs more points) maybe if your points holde is a partner airline you can see if this is an option.
Melbourne is a great city, and tourist attractions. The zoo, great ocean road, sovereign hill, wineries, cooks cottage, werribee zoo (lion park) luna park and much more. Transport is excellent as it is a planned city.
try Melbourne Victoria Australia - visitvictoria.com The official travel and accommodation site for Melbourne Victoria Australia
Sydney has the harbour, opera house, zoo etc
Queensland is more spread out the gold coast is tourist central but has easy access to all the theme parks which your kids may be a bit young to enjoy fully. It also has lovely beaches and a good variety of family friendly accommodation. Car rental is pretty cheap for a mid size family sedan so you can travel between the gold coast, sunshine coast pretty easily. further north is port douglas and cairns.
My two family favourites are:Maroochydore - north shore beach houses (we stay in a 4 bed with study) or Caloundra - rolling surf resort (we stay in a 2 bed pool apartment with own access to the pool)
hope it helps
Happy to get more info if you wish