Look at the development of the honeysuckle area it has improved from previous woolsheds.... you have 4/6 rail lines heading down a corridor for an area that makes no sense for such trains....
My personal oppionion for the whole thing is make a hub for sydney and hunter trains in the hamilton area with a light rail service running into town...
I currently live in switzerland and have travelled quite alot the world.... a main hub in hamilton (area) at a potential part of where a high speed terminal could be would be the way to go....
the entire area can be revitalised parks, buildings, social area that makes it inviting to come to newcastle... We have a new economy to build if we just keep going as is... more buildings for the people that want to keep the old ones will lay dormant and then will cost even more to renovate etc etc etc.....
I grew up in muswellbrook and caught the train into newcastle on the occasion.... For me i would see no problem having to change train and jump in another... thats what public transport is, not door to door same car service...
with the potential of light rail in the city it could take one potentially closer to where you actually want to go.....
The biggest issue would be timetabling... which in this case for the light rail should not be the train runs at this time this this time but always every 10/15 mins. forwards backwards all day long...
Also for ye green people the train that comes from muswellbrook is a diesel engine... it would reduce the amount of fumes within that area too :P
this hasn't been collated and written in a proper response, just a few info ideas thrown together... whilst being bored in a pathology lecture...
If needed will respond next time with more developed answer...