In the big picture, I suggest starting at the downtown Southern Cross Station, where there is an office where a nice person will answer all of your questions, give you maps, and sell you a Myki card, if you want. If you are taking the Skybus from the Airport (which departs every 10 minutes all day and night), it takes you to the Southern Cross Station. Downtown trams are free and a station is a one or two block walk from the Southern Cross Station. A Myki card is for public transport in the larger metro area.

Yes kit is a two block walk down the hill to Elizabeth Street and Collins Street and the Arcade is a few meters east of Elizabeth off Collins Street.