I can highly recommend taking the boys to the "Puffing Billy", it is a historical steam train ride and hour out of Melbourne that kids just love. It goes through the Dandenong Ranges which has beautiful scenery.
Your suggestion to go to Phillip Island is a good one - very much worthwhile.
Another suggestion could be a day tour of the Great Ocean Road. Most people that come to Melbourne go on a day tour of this.
A day could be spent on the free "Melbourne Tourist Shuttle" which is a hop on / hop off bus that takes you to all Melbourne's top attractions. Check out www.thatsmelbourne.com.au, do a search for Melbourne Tourist Shuttle and it lists all the attractions. Best thing about this service is it is free and is the easiest way to get around.
Other suggestions could be a day trip to Sovereign Hill in Ballarat (an old Gold mining village).... worth googling this to see if it is of interest to you and the boys. It shows a different part to the Australian history than what you have (or will) probably learn about our aboriginal past.