IIRC the latest long-term planning document from PTV/VLine/whoever it was, assumed that by the time Melton electrification was on the table (which, due to Loop capacity constraints, would be after Melbourne Metro) the Ballarat line frequencies would have nearly doubled (5 trains every 2 hours on-peak, 2 trains per hour off-peak) and that this would be sufficient for Bacchus Marsh without extending the electrification - at least for the foreseeable future. I would tend to agree, 30 minute frequency is pretty good for a town of its size and distance from the city, given that it's nowhere near contiguous and likely won't be for decades. But then, I don't live in Bacchus Marsh, so maybe I'm biased.
Personally I think the best way to go is to duplicate Deer Park-Melton ASAP, up diesel services when that's done, build Melbourne Metro so you have the capacity (which of course benefits the whole network) then electrify. There is so much that needs doing that it realistically has to be done in stages, which as Nightfire suggests has the advantage of giving good service quickly and demonstrating that the passengers are there to justify electrification.
As an aside - roughly where is this "Toolern" station the lobby groups want supposed to go? The Toolern Creek is essentially right next to the current Melton station so it seems a bit stupid to build another one there. I know more development is planned in that general area but I would have thought out Brookfield way would be more deserving?