I grew up just south of Newcastle and in the 80's there wasn't alot of hope for the future after the steel mill closed which still had not been announced at that point but it age was being noted.
You say not everyone goes to the CBD, yep and in Sydney most of these people drive. The Y-link took over 1m people in the catchment and growth of Parramatta as a hub to make it more than a peak hour service. Newcastle is no Parramatta. The problem in places like Newcastle the work force locations are less-centralised thus making PT more difficult.
As you say, employment in these areas is an issue. Fixed centralised employment is what drives PT, not couch sitters, tradies etc.
Maitland, Morisset, and Cessnock all have railways with frequent trains, but if there are no centralised jobs then who will use.
The railway to Toronto will never be rebuilt. The same type of service in Sydney does not exist and the closest, the Carlingford line is going to be converted to LR. In Brisbane, the equivalent is the Doomben line and this is also struggling and previously been closed.
No Newcastle is not Parramatta, but neither would you run double deck trains for suburban services anywhere in Newcastle, you would use 2-3 carriage cost effective EMU's.
I less centralized employment is a huge issue for Newcastle (not for Wollongong though, would be easier to improve services there) but just by upgrading the existing railway line with more stations and accessible stations between Newcastle Interchange and Fassifern and increasing services frequencies on the services that the government already runs (and will never stop due to obligations, unless the Hexham freight bypass sees the existing line become another cycleway), you could have a suburban line serving;
-the few CBD workers
-workers in Hamilton and Broameadow
-retail workers in Kotara + shoppers
-weekend visitors to Blackbutt Reserve
-residents of Garden Suburb and Cardiff Heights
-retail workers and residents of Cardiff
-retail workers in Glendale + shoppers
-workers on Cardiff industrial area and EDI
-retail workers of the large Bunnings and IKEA/Costco (if built)
-residents of new housing development near Cockle Creek
-residents of new housing development near Booragul
and that's just with the existing line, I'm not really talking about rebuilding old lines, I just mentioned Toronto since Fassifern is a kind of isolated places to terminate trains. Realistically there is little chance of rebuild, as for Carlingford, being converted to light rail is actually a good thing, since it will still be a rail services but with a higher frequency.
And remember, local services (well all-stop Sydney services, formally local services by 2 carriage K-Sets) already run out of obligation and manage to only be patronized by pensioners, students, and employed, so why not upgrade the service to something that can actually be used since there is no erasing it, even if the government wants to.
I'm not buying this anymore. Absolutely services can be improved in newcastle and wollongong. Are they inadequate to the point that you are complaining about. Absolutely not. For proof browse to the anytrip website and focus in on either of those cities and check out how many services are running. What other state runs a rail service out of it's second city to it's suburban areas. There is a ferry service from Stockton to Newcastle for goodness sake.
Sure the toy tram is a novelty at the moment but it can expand in the future. You can pretty much forget about re opening the old lines like belmont since most of them are now bike paths. The government is buying new trains for these areas including trains for non sydney centric services to maitland and singleton. An expansion of bus services is something that could be pushed but outside of the main lines you aren't going to get rail services back.
Sure you can look at anytrip and say that there are plenty of services and say it's adequate, but you can look at the McDonald's menu and see several salads, does that make that adequate?
The proof is in the patronage, public transport in Newcastle is only really patronized by pensioners, students, and unemployed, and I've heard this from a bus driver, and employers in the area don't want to hire people to use public transport due to inadequate and unreliable services.
The proof is in the quality of services as well, take the local services in Newcastle for example, if there is a local destination along the line, it literally won't have a station, and if there is one, a large multi-lane roundabout or lack of pedestrian crossing will ensure that no one is using it.
If the light rail can be expanded in future to multiple suburbs including those once served by rail, and the services are cheaper and faster than driving (to attract passengers), then that's great and will be proof that the government is not too 'Sydney-centric', an expanded ferry service would be good too, might as well take advantage of Lake Macqaurie.
As for buses, upgrades are necessary since not everywhere can be served by rail or ferry, but they should not be fully relied on to provide public transport since they are not attractive to passengers, since buses run on low frequencies, rarely early morning or late night (and if they do, only one direction), reduced services on weekends (compared to most trains services), slower than driving, and the fares can be more expensive than petrol - these issues would need to be overcome for buses to be an attractive mode of public transport.
Realistically, I know that there is little chance of the old lines being rebuilt (even if it's my public transport dream), the government woulnd't want to pay for it, and there would be local opposition from those who are content in their cars and would miss their cycleways.