The following very simple explanation on why clouds are seen off the coast early in the morning and then dissappear is from a ballooning website
The SST's off the Queensland coast are quite high at the moment and the warm tropical Leeuwin current is running strongly off the WA Albany coast
Ocean temps for the last 6 days around Australia's coastal waters can be found in the CSIRO's marine division point and click temp maps
The BOM has ocean temps and current maps here. Linky
Low level clouds are often seen in the early morning in places like western Victoria and as we glider pilots,say, they "burn" off a couple of hours into the morning as the temperature rises and the relative humidity declines.
I have seen lightning in the tops of thunderstorms from well over 350 kms away.
We left Yarrawonga on the Murray in eastern Vic to travel to Horsham some 400 kms to the west "As the cocky flies"
soon after dark one evening and could see glowing flashes of lightning playing amongst the cloud tops far to the west.
We eventually reached that thunderstorm line which was rapidly moving eastwards at Donald , nearly 300 kms from when we first saw those lightning flashes in the cloud tops and that storm line had been moving towards us for some 4 hours before we reached it so 350 kms is a very conservative estimate on how far away you can see lightning in cloud tops on a clear night.