I’ve been reading about the attack on Pearl Harbor and it just seems like an obviously bad idea. Australia and New Zealand would have been much better targets. The supply lines would have been much shorter. Japan could have actually held them. And it would have given them half of the British Commonwealth’s land, which amounts to a lot of undeveloped land.
Why didn’t they go that route?
It wouldn't have achieved the same aim. The attack on Pearl Harbor was intended to remove the potential threat of the United States Navy. Crippling the US fleet would have given the Japanese almost free range in the Pacific for a few years before the US could rebuild the ships that Japan intended to destroy at Pearl.
Attacking Australia and New Zealand would not have achieved the same aim. The Royal Australian Navy and the Royal New Zealand Navy never could have posed the same level of threat as the US Navy did due to the far smaller resources pool Australia and New Zealand could draw on.
Your assertion that Japan could have taken and held Australia is incorrect. An invasion of Australia was proposed by the Imperial Japanese Navy, chiefly by Captain Tomioka Sadatoshi who rightfully foresaw Australia serving as a base for a potential Allied counter-attack. However Navy estimates of what would be required for a successful invasion and occupation (three divisions of between 45,000 and 60,000 troops) were woefully inadequate. The Army on the other hand iniststed that ten divisions would be required. Although many of Australia's trained divisions were deployed in North Africa, seven militia divisions were permanently stationed in Australia and would oppose any invasion, potentially long enough for the overseas divisions to be recalled and to launch a counterattack. The Japanese Army couldn't supply such forces. Just before Pearl Harbor, the IJA had 51 divisions, 28 in China, 13 in Manchuoko and 10 in the Japanese home islands (5 of which were untrained). The army was not willing to weaken its forces in China or Manchuoko and divert them to an invasion of Australia as units were already needed for the coming invasion of Malaya and South East Asia.
Additionally your assertion that supply lines would be shortened is somewhat misguided. Yes, the ships would need to travel a shorter distance but to supply and sustain an invasion force, it was estimated by the Army General Staff that between 1.5 and 2 million tons of shipping would be required and that would mean a diversion of shipping from normal merchant activity which would severely impact the Japanese War Economy.
In 1992, the Australian Parliamentary Research Service published a paper examining the possibility of a Japanese invasion and their findings form the basis of what I have written above. You can read it here if you like.