Invalid addresses are highlighted in the unshipped screen by the red exclamation mark, there are several ways to correct these. See how in the following tutorial.
Select the Issues menu item on the left hand menu and then click the auto correct button at the top. Each address with an issue will be checked and if a solution is found, it will be displayed with the modified address highlighted in Red.
Ensure you check each change before saving the changes using the button at the top.
Issues screen inline editing
For any addresses that could not be auto-corrected you can edit the address directly from the issues screen (note that this will not work in the unshipped screen).
Click on the field that you wish to edit and once complete you will need to save your changes using the button at the top.
N.B It is important to check the suggested corrections and not just automatically select them. This will avoid inadvertently changing state or suburb.
Edit Address in the Shipping Dialog
The shipping dialog can be displayed at any time by clicking the order number or the name. In the shipping dialog there are several tools to correct addresses.
a) The address auto-complete lookup
b) Suburb lookup
c) Link to google maps
You can use these tools to fix any remaining issues.