I'm going to say Monash Commerce / Engineering, since
their course is well designed compared to the Masters of
Engineering, which as you said hasn't been relatively successful.
Plus, if you really feel passionate about engineering, it's good
to have the hands on engineering experience, which Monash
already has.
As to the campuses, I reckon it depends on which campus
you prefer. For me, I live so close to Clayton. Hence, I chose
Monash over Melbourne because I can participate in club activities
easily even though I qualify for Melb. Commerce. But imagining
Melbourni uni life being better than Monash isn't really true,
Melbourne and Monash has different aspects that are good.
It really is up to you, but on the academic side, I'd pick comm/eng
because they already have an established system here at Monash.