The opening Grand Slam of the season, played in milder conditions than Melbourne usually delivers and to record crowds, largely followed the script, although there were some shocks along the way.
Djokovic maintained his formidable record on the tournament hardcourts, winning his fifth title for his eighth Grand Slam crown, overcoming sixth seed Andy Murray in the final 7-6 (7/5), 6-7 (4/7), 6-3, 6-0.
He said the win had more meaning since becoming a husband and father last year.
"I think it has deeper meaning, more intrinsic value now to my life because I'm a father and a husband," he said.
"It's the first Grand Slam title I won as a father and a husband and I just feel very, very proud of it."
Along the way he had to fight off defending champion Stan Wawrinka, from Switzerland, who battled the Serb over three and half hours and five sets before running out of steam in the last set.
The irrepressible Williams consolidated her place among the game's legends at age 33, overwhelming arch-rival Maria Sharapova 6-3, 7-6 (7/5) — the dominant American's 16th consecutive win over the Russian.
Williams now has 19 Grand Slams, overtaking 18-time major champions Martina Navratilova and Chris Evert on the all-time Open-era winners' list, three behind Steffi Graf.
And she is already targeting number 20 at the French Open.
"I would love to get to 22," Williams said.
"I mean 19 was very difficult to get to. Took me 33 years to get here, so I would love to get there.
"But I have to get to 20 first, and then I have to get to 21. There's so many wonderful young players coming up, so it will be a very big task."
While there are some promising young players in action, the widely-touted generational change largely failed to materialize in the first major test of the new season.
American teenager Madison Keys was the exception, striking a blow for the new brigade by defeating childhood idol Venus Williams in the quarterfinals before falling to Serena in the semis.
Her reward is a place the top 20.
But no one else stepped up sufficiently.
Young guns fire blanks
Canadian Eugénie Bouchard and Spain's Garbine Muguruza were ousted by old stagers like Serena and Sharapova, while Sloane Stephens was sent packing by Victoria Azarenka who is on the comeback trail from injury and depression.
It was a similar scenario among the men where none of the young guns such as Japan's Kei Nishikori, Canadian Milos Raonic and Bulgaria's Grigor Dimitrov were in contention at the bitter end.
Nishikori and Raonic did make the last eight, along with Australian 19-year-old Nick Kyrgios, and their time may come, just not yet.
The biggest upset saw Federer make his Melbourne earliest exit in 14 years, beaten by 46th ranked Italian veteran Andreas Seppi in the third round.
The defeat meant the 33-year-old has now not won a major since Wimbledon in 2012, raising fresh doubts as to whether he can add to his record 17 Grand Slams.
The world number two insisted it was simply a blip and several of his rivals backed him to bounce back.
"If I had to bet I would probably bet that he would win another one (Grand Slam)," Scotland's Murray said.
A lesser upset saw Federer's long-time rival Rafael Nadal bundled out in a straight sets quarter-final mauling by Czech veteran Tomas Berdych, a man he had beaten on all 17 previous times they had met.
The fiercely proud Nadal, who suffered his first 6-0 "bagel" at a Slam since 2006, came into the tournament recovering from injury but made no excuses.
On the women's side, eighth seed Caroline Wozniacki again failed to deliver, dumped in the second round by Azarenka, while third seed Simona Halep only managed the quarter-finals.
The unseeded Bethanie Mattek-Sands and Lucie Safarova won the women's doubles while Italians Simone Bolelli and Fabio Fognini claimed the men's.
Meantime, veterans Martina Hingis, of Switzerland, and Leander Paes, from India, clinched the mixed doubles in another boost for the old guard.
For Hingis, 34, it was her first Grand Slam victory since coming out of retirement.
"Who would have thought it?" said the five-time Grand Slam winner, who retired in 2003 at the age of 22 after a series of injuries before making a brief comeback in 2006-07.
"It's more than I could ever dream of."
Hingis was forced to quit for a second time in 2007 when she was banned from WTA play after testing positive for cocaine at Wimbledon, although she denied using drugs.