An important question to first ask here: From what point are you talking about starting the modernisation? If you start it in 1990 you will get a different set of answers to 2000 or 2010. Also do you want it through to 2020 or beyond (say 2030).
The main areas to look at would be:
Engines - easiest change here is probably to change the TF30s to GE110s (this was looked at for the RAAF's F-111s)
Avionics - main change here would actually to make them more supportable (though that often comes with capability advantages as well) - for one, I would look at replacing the Pave Tack Pod
Airframe - definite fatigue issues here, though not so easy to solve, though at the same time there are ways. I would also want to see some LO technologies applied.
BTW, I am moving this to the F-111 Ideas and Inspiration thread.
Regards,
Greg