For the states select list it is static, so it has the same entries regardless of the country that is selected. If you do not want the US states in there you can just remove them, if you need to add Australian territories you will need to add them manually to the list.
As for the currency that you see on PayPal this might be due to an account setting. You should check in your profile to ensure that you have it setup to work with AUD instead of USD. You are passing the currency code correctly it seems, did you update the checkout and pp_confirm pages both?
For the name that you see in the header of your PayPal page you should be able to customize the look of these pages, here is a link to the PayPal page that discusses making these changes:
cowp_summary-outside
