The term Aborigine is considered to be offensive to the indigenous peoples of Australia - it was the primary term used during the period of explicit white supremacy and genocide that is well within living memory. The terms typically used, at least in my experience, are First Nation Peoples, Indigenous Australians, or Aboriginal (and Torres Strait Islander) peoples
In terms of the taboo around depicting deceased individuals, my understanding is that the custom both varies across Australia (first nation peoples are incredibly culturally diverse, and often are viewed as a monolith) and where the custom is present, it is typically applied for a period of mourning. There are some good guidelines
here. If there was a desire to depict the First Nations of Australia, I think it would be possible to do in the game.