PS4 in Australia is it possible to be competitive?

[Niwashi]

- I live in Australia so I am getting a ping of 400-500

If ping becomes too much of a problem, you could try one of the servers in Japan. I've heard Tonberry has a significant number of English speakers from Australia and New Zealand. (There may be others, too. I'm in the US myself, so haven't really looked into it.)

- Playing on PS4 typing is pretty much not an option.

You'll want to get a USB or wireless keyboard. Nearly all PS3 and PS4 players use the controller for character actions, but switch to keyboard to type. The game is quite well set up for action controls to be done by controller, but when it comes to typing, yeah, that's way too awkward without a real keyboard.

- Having young kids I can only realistically play 2 - 2.5 hours per night

That's probably pretty typical. There are certainly some hard core players (and some who are casual in playstyle and hardcore only in the amount of time they spend) who will be on significantly longer than that, and they'd be able to advance faster than you, but with 2 - 2.5 hours at a time, you should be able to do pretty much any part of the game you want. You'd just have to be a bit selective of which aspects of the game you're going to focus on each day, rather than trying to get everything done to its maximum every day.

Is it possible to get the best gear etc through crafting or other single player means or is it a case of the more people involved the better the gear?

Top end crafting can produce some nearly-the-best gear. As various patches are released, there are times when, for at least some of your gear slots, the best-in-slot items are crafted (then another patch will come out, with newer gear, and that will change again). There are also soloable or PUG-able combat activities that earn currencies tradeable for some really good gear, not quite best-in-slot, but near enough to wear it while running the high-end raids that can drop the best stuff.