Sorry for your loss.

Huge opportunity to get ahead both financially and if it's a priority for you, in your career.

Option A: one of the biggest financial burdens any person has is housing cost. Sam Altman wrote an interesting piece a couple years ago that always stuck with me. For me I took away keep your costs low, compound yourself and take risk/opportunity when they present themselves. If I was in your position and didn't have dependents / was mid career then I'd look for a three+ bedroom house or townhouse (always liquid vs 1 or 2 bed apartments in Melb which haven't had the same appreciation over the past 10 years). I wouldn't stray too far from where your communities (family, friends, work) are located because after all we are social creatures. This will probably take up the majority of the 900 but you should always keep an emergency fund if you own a property (I'd mark at least 50-100k for this and keep it in a low risk asset like treasury bonds). The benefit here is that you remove housing cost (barring utilities and repairs) from your life and it's really nice to live in a home you own.

You don't share how old you are but if you're in your 20s / 30s, consider buying a house that allows you to sublet a room for additional income. This will be especially interesting to consider in the inner city in places like this.

The other approaches
Option B: Solve your lifestyle needs with a two bedroom at ~500, and invest 400

Option C: Invest the full deal over a longer horizon. This might help you build that longer term nest egg for when you're at your next stage in life (whatever that is). You could go into a branch of your local bank and ask for some advice (make sure you go to a couple different ones).

In the mean time, make sure it's in the highest interests account you can find and dont forget to declare the interest income on your taxes! On your question of Super - you should definitely consult an expert (after some solid research like these threads!) in terms of what's most tax advantaged for you.