GF - Thanks for the question, the short answer is that Class E would not have prevented or even mitigated the incident at Ballina. I will try and keep the longer answer as short as possible.
Class E exists because the FAA believes that IFR flights should always be in controlled airspace. This is linked to an ICAO requirement for instrument approaches to be contained in controlled airspace. For instance, take the UK, until RNAV came along an aerodrome with an instrument approach had to also have a control tower. (Admit to being out of touch now that RNAV available), The US solves that problem with Class E airspace because they have many aerodromes that do not warrant a control tower, just like Australia....
That is why I maintain that Class D airspace and a control tower is required at Ballina. The Tower would be the equivalent of an FAA VFR Tower because the Class E airspace surrounding it would require Brisbane Centre to control IFR approaches and separate IFR aircraft. When the Centre has solved whatever IFR separation problems exist then the inbound aircraft is transferred to the Tower which is responsible for separating the VFR aircraft from the IFR. Hamilton Island manages to do this with one controller while separating IFR and VFR aircraft, hence costs are kept as low as possible.
If there is no Tower then the IFR pilot needs to listen on the CTAF and self separate with VFR traffic. If maneuvering is required by the IFR aircraft then it should be able to be accommodated by the Centre controller, however, if the clearance is via an instrument approach that may require a go-around. IFR aircraft can also make visual approaches if they have the aerodrome in sight. In fact, I believe that if an IFR aircraft reports the aerodrome in sight, in the US that automatically generates clearance for a visual approach. If IFR aircraft are consistently having separation problems with VFR traffic then very likely a Tower is required.
I hope this is useful