Was at the 56 Albert Park event which was a sort of support event for the Olympic games and drew a (for then) excellent field. MOss and Behra in 250F Maserati s for the main event and in 300S Maserati s for the Sports Car race. As I recall Moss won by almost a lap. For those days that was close racing
The circuit was narrow, edged with large trees and a few hay bales, and by today's standards horrendously dangerous for competitors and spectators.
It was also considerably shorter than the existing layout so would have required major works, and probably an even greater change in the use of the park for the rest of the year. The whole excuse for the development was "beautification and cleaning up of the Park" which had become a rather unsavory area.
The present layout incorporates a number of roads which are part of the suburban traffic structure of Melbourne, and also fits the demands of delivering spectators by trams to the circuit well.
Don't know who designed the circuit, but would guess that the alignments required for traffic flow for the rest of the year would have been dominant factors along with what was economically and politically expedient. Ron Walker was the God-Father of the project.
Maybe some improvements are possible but anything like the original layout would probably be impossible.