As far as I know, most kids remember Australia just as the "big island under (south of) Asia and right from (east of) Africa.
None of the above pictures is correct. C is probably the closest one. Papua New Guinea, is about 200km (about 120 miles) from the coast of Australia.
Answer to your question about change in timeline. I searched out some of my older school maps and in internet. Here is why it seems to lots of people that Australia "used to" be more distant:
1)When teaching continents, some (especially older) textbooks leave out most of the islands.
I had one map similar to this in my old workbook:
2) Also often smaller islands of Indonesia are left out, so it creates an illusion of them not being there at all. When there are no small islands on the map, it seems as there is much more distance between Indonesia and Australia. Textbooks often tend to leave out the islands of Sulawesi, Maluku, Lesser Sunda Islands ( Lombok, Bali, Flores, Komodo & Rinka) and also East Timor. You can imagine how the map looks like when only Java, Sumatra and Borneo (Kalimantan) are on the World Map from all the islands of Indonesia. There seems so much more distance between Indonesia and Australia/Papua New Guinea and that creates an illusion of them being more isolated from each other.
You can take a look at it from here and imagine how it would look like without these islands:
3) As you learn the easier maps at first, then often people do not pay much attention on the maps later on. The first time is always the one that has the strongest part in the memory. When repeating what you already believe to be knowing, you tend to miss the details.
4) Most people do not know world geography well, except the nearby area of their location They might have an idea where something might be situated at, although they do not know the exact location.
edit on 29-4-2013 by Cabin because: Spelling mistakes