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Can you tell me a little more about Indonesia and their Muslim influence? I see that around 90% are Islamic. Naturally, I assumed it would be a more Catholic, Buddhist, and Hindu based region.

Well Indonesia is an interesting case. They are predominantly the Shafi'i fiqh, and were influenced by a movement called Islamic modernism, which lost out to Salafism in the early 20th century. If Islamic modernism had won the world would be a much different place. Regardless that is their primary school, but there is a large portion that is non-denominational, while Islamist influence is growing (I use Islamism, Salafism, and Wahabism interchangably even though they mean slightly different things, mostly because that is the parlance that is developing in the West).

One thing that people should understand about the spread of Islam is that it was primarily spread through trade, and trade and tax receipts were the primary concern of early to middle Islamic empires. They didn't necessarily want groups of conquered people to convert as the jizya tax made up a large portion of their revenue. Obviously avoiding this tax gave groups of conquered people incentive to convert. In the case of Indonesia, Islam spread almost solely by traders in its early stages, while toward its later stages Indian influence from the Delhi Sultanate seemed to play a large role as well.

But first we have to acknowledge that the influence of Muslims in China increased after the Mongols, where they wholesale imported groups of people into China to serve as their administrative arm. That administrative aspect continued into the Ming Dynasty (as I think it was an Emperor of the Ming who penned what's called The Hundred-Word Eulogy) with Muslims in some important positions. There is evidence that it was also Chinese Muslim influence that contributed to the Islamization of Indonesia.

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Are they a more peaceful and tolerant (Sunni vs. Shia) version of Islam?

Well they aren't Islamists yet, which is very good, and the further they stay out of the purview of the outright Islamists the better. And what moderate means in the Islamic context is different than it does in a secular context. Regardless Indonesia is ostensibly a secular country, and it is marginally more influenced by Islamic modernism makes it appear more moderate in comparison to other Islamic countries. The degree to which it is moderate is of some debate. Or what moderate means in the Islamic context.

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It's an island dominated area. Australia certainly isn't. The Philippines and Vietnam aren't Islamic dominants as well...

Well in the Malaysian and Indonesian context, it has to do with Indian and Chinese trade, as well as a continued competition for influence. Before Islam those places were animist, Hindu or Buddhist, and after the Islamization of Northern India Islam essentially became the currency of influence.