I'd want the northern beaches as a new franchise enclave, cut off from the north shore by the Spit and Roseville bridges.
How about something like:
Northern Beaches (perhaps with a 2nd home in the Central Coast?)
North Sydney (including North Shore, Hills District, Ryde, Hornsby Shire)
Western Sydney
'Sydney' (East/Inner West/Southern)
Newcastle/Hunter
2 teams from Brisbane (North and South?)
Gold Coast
Melbourne
Perth
Canberra
Fiji
12 team competition, home and away plus 6 team finals with a shorter representative season above it played mid season - either a state of origin series (NSW, QLD and Combined States) or a shorter format Super Rugby, and local club rugby beneath it. Each team could also have a sevens squad.
Other potential locations for teams: North QLD, Central Coast (as an independent team), Adelaide, Samoa, Tonga, Asia?
Pick the Wallabies from anywhere.
Maybe this isn't it, but whatever the answer is (to the question 'how do we stop and reverse the decline of rugby in this country?') it just has to be something that better connects the professional level of the game in Australia to the grassroots. There are too many rugby participants and people with a general interest in the sport that don't care about Super Rugby.