The six points of the Commonwealth star represented the six states of Australia. Later, a seventh point was added to represent the territories.

The reception of the flag was mixed, and it remains debated til our days.

The Argus newspaper reported the following in 1901 about the new flag:

In years to come the flag which floated yesterday in the Exhibition building over Her Excellency the Countess of Hopetoun, who stood for Great Britain, and the Prime Minister (Mr Barton), who stood for Australia, will, in all human probability, become the emblem upon which the millions of the free people of the Commonwealth will gaze with a thrill of national pride."

Alternatively, the then republican magazine The Bulletin labelled it,

a staled réchauffé of the British flag, with no artistic virtue, no national significance… Minds move slowly: and Australia is still Britain’s little boy. What more natural than that he should accept his father’s cut-down garments, – lacking the power to protest, and only dimly realising his will. That bastard flag is a true symbol of the bastard state of Australian opinion.

Wikipedia article about the flag