PayPal requires proof of posting to the PayPal registered (shipping) address. So I don't think there was a problem posting to P.O.Box.

But I'm not an expert. So I'm not 100% sure.

But Sending $100 item by 60c postage with registered post is not a good idea because Australia Post won't compensate for letters even though you register them. I think it's better sending as registered parcel for $100 cover.

I send my items to P.O.Box all the time. P.O.Box is usually safer than posting to an address if it's regular post. The mail can't be stolen from mail box, For the registered post the buyer has to show ID to pick up the item. I would have posted the item to the P.O.Box if I were you.

As for your feedback percentage drop, you can start a new ID if you want your 100% back. Not many feedback to lose.