Is you MEL HHonors option for the city of airport Hilton? If city, then that would be a reasonable option.

Sydney is always going to be best place for NYE festivities. There is nothing like the fireworks over the harbour, but you will need to find a good viewing spot before hand - the good spots can get crowded. The Gold Coast is also a happening place for NYE, but often clowded by drunkeness and roudiness so you need to be a little careful and apply come commonsense. I would chose between Sydney and Surfers Paradise unless the attraction of a MEL HH stay is important.