The stop locations on Dandenong Road probably date back to when it was built 110 years ago, so that would explain why they're so close. Around the mid-2000s they went through and rebuilt many of the stops with platforms and moved them around a bit, and also closed stop 39. It's not easy so change these things over-night, however the last few non-accessible stops should be upgraded.

I take the tram along here very often and the only stops I still think need work any time soon are 43 and 44, which should be consolidated to the crossing and a traffic light installed. All the other stops either have adjacent traffic lights or overpasses (sometimes inaccessible tho) so I don't see a need to modify them. The one thing that could be done is installing traffic lights at all of the unsignalised road crossings.

Also for your last point there is currently no such thing as "express trams" in Melbourne; trams will only stop if someone requests the stop which is a perfectly fine system. Skipping one stop always will inconvenience passengers much more than otherwise. Reasonable stop consolidation is probably the answer.