I agree that this is just a 'mixed marriage' to use the usual Catholic terminology, ie one between Christians of different denominations. A marriage of this kind in a Catholic church would require a dispensation, frequently noted in the margin of the marriage register in the church.
Dispensations could be required for all sorts of reasons and is basically just an official decision to waive usual practice. It was usual practice not to allow weddings during Lent (period before Easter) or Advent (period before Christamas) for example, but if the groom was soon being posted abroad by the army, or one of the parents was close to death but wanted to see his son /daughter married, it was possible to waive the rules for the benefit of those involved.
One of the most usual dispensations in the 20th century was to allow a mixed marriage. My father was very high church C of E, my mother was Catholic. In the ninteenth century, I would expect a mixed marriage in Australia to be less common than in 20th century England, but still possible at a time when the local population is a mixture of people whose backgrounds are very different.
There would be no obligation for anyone to convert to anything, but there was definitely a tendency for some Catholic priests to be reluctant to co-operate by granting a dispensation. My aunt was married in a C of E church in 1932 (because her parish priest dug his heels in when a neighbour told him she was planning to marry a non-Catholic). She was married again, to the same man, in a Catholic ceremony in a neighbouring RC parish church, by a priest who had recently baptised her first child in 1934. He couldn't understand why no dispensation had been given in the first place.
I agree that you need to keep investigating other possibilities and keep an open mind over the mixed marriage possibility. Good luck with your search.
