Before any race, it's a good idea to spend some time doing qualifying, not to set the fastest lap possible, but to make sure you know exactly the car and track combo.
Me personally, I'm usually a second per minute of track time slower than the top ten times, so if a top 10 time is a 2:02.5, for example, I'll keep doing laps in qualifying TT until I can hit 2:04.5. After that, I do even more laps, to make sure I can consistently hit the same times, within about 0.2 seconds of each other, before I enter a race. Of course, that's just my benchmark, everyone else will be different. Find what's realistic and works for you.
Doing so many laps in quali TT, you'll also get used to the car. You'll know exactly when to brake for a corner. Things like "turn 1 Fuji in this car with these tyres, I have to brake on that small exit road to the left right before the rumble strips start", for example. It's a great idea to use trackside scenery, distance marker boards, shadows, etc., to help you gauge your braking. Of course, not every corner of every track has this, but for most of the tracks in the game, there should be enough help. After a while, you'll get a good idea of how long it takes your car to stop, even without these markers. It's very important you know roughly your car's stopping distance as well, since if you're overtaking someone, you will never have your time trail line, and need to go a little slower as a result.
Another important thing is to always have your radar on. I don't understand why PD allows us to NOT look at it: it's indispensable in a game where you can't turn your head to see your surroundings. When making an overtake, you have to make sure to leave enough room for your opponent on the outside of the turn if you're in, and if you're being overtaken, that you leave enough room for them on the inside, meaning you don't meet the apex of a turn. Remember that the car in front of you has the right to decide the line they want to take, be it defensive or passive, but as others have pointed out as well, etiquette is to "pick a line and stick to it". If you're going to defend a turn, take the inside well before approaching a turn. Brake a bit earlier, and expect to not have the whole track width to yourself.
Bathurst is a bit of a bad example to work with... the track is narrower than most, and taking the middle line down a straight might or might not be blocking, depending on what car you're in, and whether you leave enough room for a faster opponent to pass. It's rude in my view to take the middle line on a straight: there's no real reason to do that, and any latency or lag can nudge your opponent onto the grass. If you want to defend, stick to the inside. If not, stay on the outside. On any other track, it's less of an issue: taking the middle line is being "semi defensive", and your opponent can choose to stay on the outside lr really dive in on the inside.
Lastly, if you're in a C/S lobby and people are crashing out, use that to your advantage. Drive safely and work on your own consistency instead of racing others. Let them crash out. Raise your DR to B and A, and that's where your opponents are faster and smarter, and you can race them properly.