It's the F35B that's too costly. RAN couldn't afford them when a squadron of six planes is going to cost about US$750+ million.
I really wish Australia had reinforced their LHA's with F-35B capable flight deck. It must be too costly to do it.
It isn't either of those things. :-)
The Royal Australian Navy has a requirement to conduct amphibious ops in both war and peace time, these ships were acquired to satisfy that need, not to be an aircraft carrier. There's a lot of conjecture regarding the wisdom of the move, but that's not for this forum.
I'm guessing the old Harrier is pretty bad when it comes to stealth given the giant air intake... I don't know how much of that you could "build away" today?
OTOH if you want an aircraft for fleet defense stealth might be of a lesser concern. After all if you need to defend is sort of a given that the enemy's found you! :D
The Harrier has a pretty big RCS, this is true, but that wouldn't prevent that style of aircraft being developed with more advanced design, as this would be using RCS suppression technologies. The truth is that demand for VSTOL aircraft is incredibly low, even with the F-35 partners included, and that both drives price and the overall production numbers. No one buys VSTOL if they don't have a conventional carrier because they are substantially less capable than a conventional fighter, even the same model! They have shorter legs, lower payload limits, longer training cycles and higher maintenance costs. VSTOL is an out an out loser in every comparison except "launch from limited space without catapults".