I agree, Tree Spirits find at Preston seems a great possibility, may I suggest a email to the Cemetery to confirm details.
I am wondering why parents decided on a Burial in Melbourne. Could it be that the family was related to the other fellow, Ralph Tofts, buried in the same plot at Preston.
A search on Ancestry (Australia, Newspaper Vital Notices, 1831-2001) could not find death/funeral notice for James in The Age newspaper. I found the death/ funeral notices in The Age for Ralph, no mention of a Murphy family, however after a Requiem Mass at the Church burial at Preston Cemetery.
Cass
just checked BILLION GRAVES and there is a photo of the headstone at Preston Cemetery
Ralph L Tofts and JAMES A MURPHY, so I feel that you have found your shipmate
https://billiongraves.com/grave/Ralph-Tofts/3497493