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Avoid catching the train to the track. Even thou the train station is right there, you'll more than likely get done by the ticketing system in Melbourne. My Uncle was out from the UK recently and he ended up using one of my siblings Myki cards as it was too much of a process to set one up for 3 weeks. Look up the Myki system and you'll probably notice you'll fork out a small amount each day just getting to the track. Then again if you don't mind doing that, and want to enjoy some cold beverages, probably the best way to go.
As for accomodation....you'll find some accomodation in the suburb of Glen Waverley, about 10-15min north of the track. There's also the suburbs of Oakleigh/Chadstone, which is to the west and about the same time or bit more. You could go west towards Dandenong, but as suggested it's a rough suburb. There's nothing much out there in terms of night life other than a lot of ethic based eateries, and finding one that won't kill you can be a hastle.
You can choose to stay in Melbourne CBD, but I would suggest staying on the eastern side of the CBD. We have a serviced apartments chain down here called Punt Hill, which have a number of locations on the eastern side of town. There's a few others you might find on the old internet.
I hope this helps, but feel free to PM me if you have any questions.
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