The size of sleeve in front and rear master cylinder are 5/8". I'm not sure why otherwise all metric bike made in Japan had the size in inches stamped on it, but that's what it is. You must see it on your master cylinder.
I got my front master cylinder re-sleeved with a stainless sleeve. It will last forever. I am in Canada, and I was quoted ridiculous prices for this job, ranging between $270 - 400. Stupid. I found a great professional place in California, USA, called
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Karps Power Brake Service
<<<. Yes, it's far away from Australia, but perhaps still worth it. I paid around US $100 for the service. It was his first KZ1300 master cylinder and he made a custom brace to hold it in him machine, so it took him a bit longer, and now he is ready for the front. I am sure he would do the rear just as easy and professional. I think overall with shipping this might be the best and cheapest option even from Australia. But I do remember someone offering this service for about the same price in Australia, so I think you might have good luck locally. I'd suggest posting about it on Facebook groups. Many riders there from down under. If I find any old info about there I will post it here.
The piston seals can be replaced with seals from the front master cylinder kit. If you inspect yours visually up close, if there are no tears, you might most likely be able to use what you have with success.
0n the last note, you might be alright with the master cylinder as is. I used aluminum and metal polishing compound for wet polishing of the sleeve with 1500 then 2000 grid paper. Then continued with adding some oil. It turned out great and the master cylinder is as solid as new even with old original seals. The rear brake is used perhaps only 10% of the time in comparison to the 90% front. I have a feeling you will be just fine. That ridge at the top is where the stopper sits, and that's where it rusts. Like you said, the actual seal on the piston doesn't go that far. I wouldn't worry about it. Just clean as much as you can and that's all.