You will probably be asked if you want breakfast, and that will be about 5am Sydney time (probably earlier) which is 2am??? Singapore time. So you are correct, you won't get much sleep and those early arrivals can be unlucky with peak arrivals into Sydney so immigration queues can be difficult. (A few A380's arrive about that time.)

You can get the later flight but that has reduced "supper" service. So dine in the lounge, sleep on board and get breakfast at a more reasonable hour on approach to Sydney is what I tend to do.

Or an earlier "Daytime" flight. Service will be similar SQ221 but you'll probably feel more human at the end of the day.

If you get one of the red eyes you may not be able to check in to your Sydney hotel (if that is an issue) but as you say, you get the day and maybe even dinner in Singapore.

It really depends if you want to sleep or enjoy the business service.