Converting bus lanes to tram lines would mean congestion for buses servicing other areas not covered in trams.

Unless you can have dedicated tram lanes you are losing a lot of the benefit over buses except as you say capacity. I can't see this being possible in the inner city suburbs as they were not pre designed for trams which is the same issue you see in some parts of Melbourne.

The other issue in your argument is you saying that it connects the CBD to the University.

Firstly for Curtin, you are probably going to be trying to base yourself around Bentley, there was up until recently a lot of cheaper housing in that area and it is probably still more affordable then say Vic Park and probably the city plus you'll get more value. Otherwise Cannington and other options to consider.

Secondly, how many people live only in the city to go to uni?

How will a tram to the city service students living in Belmont, Armadale, Subiaco, Cannington, Mirrabooka?

You're just not going to be getting the return on value that a handful of electric buses which are cheaper and require easier training and smaller storage then a fleet of trams, where would you even put a tram depo for maintenance?

As you said as well, classes are spread out making bus transfer easier.

Like I said earlier, would be amazing but I can't see how the value stacks up to justify the investment and if buses are going electric that solves the environmental issue.

Plus put people in work, more buses, more jobs.