It's a clever design, and I am surprised at the knockers on this forum. While the Swanston Street route is better from a planning perspective, the engineering challenges are enormous compared with the much easier task of building an underground station in solid ground beneath Wurundjeri Way next to Southern Cross Station.
Through-routing most of the Burnley group through the City Loop to Southern Cross then via the new tunnel to Montague, Domain, and South Yarra to Frankston facilitates a a key movement that is at present difficult on the rail network - afternoon peak travel from the City Loop to Southern Cross. With RRL services not stopping at North Melbourne, and Sunbury trains no longer going through the loop, there would otherwise be much greater pressure on trams to transport Vline commuters from the eastern part of the CBD to Southern Cross. The new operating pattern introduces all-day connections to the loop stations in both directions.
Removing most Burnley group and Frankston trains from Flinders Street would tend to balance loads better. For example Glen Waverley line passengers changing at Richmond for Loop trains would be approximately balanced by those from other Burnley group trains changing to Glen Waverley trains to Flinders Street. Furthermore, Flinders Street is now not as strong a focus of the commuter market as it once was, and Southern Cross is becoming much more of a commuter station with the development of Docklands.
The Airport service would run through Flinders Street Station, which is close to the accommodation and tourist centre of Melbourne, and has a lot of hotels nearby. The previous plan had the Airport service terminating at Southern Cross. A key market for an airport rail service is business travelers, who generally travel light and for whom service reliability is the first deciding factor, followed by speed.
A station at Montague is an attempt at stimulating office development in the area. Google Earth shows that are as mainly light industrial, which would be more amenable to conversion to offices and high-rise apartments than adjacent residential areas. The current PT on tram 109 only serves travel directly to the CBD. A new station would facilitate travel to other areas. I would hope there is some way of capturing the increase in land value to fund the new station, which would typically cost about $200m. It's a more promising location for such development than Arden on the previous route.
My compliments to mm 42 on an excellent post that pulls all the pieces together nicely.
May I add, that as the growth of the network and its usage increases, not all trains would have been able to stop at Flinders Street anyway due to congestion. Plus the fact that Flinders Street is struggling to cope with the number of passengers who use it in peak hour already. The new rail plan alleviates this problem.