Woodman said that being back on the world sevens circuit, as they had been over the previous five or six years, felt like being back at home.
New Zealand led 17-14 when the game entered overtime but Australia secured a turnover and scored the match-winning try.
The Black Ferns pulled back an early Australian try when Alena Saili scored, the first time Australia had conceded a first half try in the tournament. Sarah Hirini scored a second for New Zealand to lead 10-7.
Australia scored to regain a 14-10 lead before Michaela Blyde to race in for a try which Tyla Nathan-Wong converted to give New Zealand their 17-14 lead.
New Zealand qualified by beating Canada 38-0 in the quarterfinal in which Portia Woodman scored her 200th try.
They qualified for the final by beating France 26-14.
Woodman said that other team members who had been involved in Super Rugby Aupiki, the end of year tour with the Black Ferns, or other parts of their lives, being back on the Sevens tour also said it was like being home.
"Getting to see the girls around the tournament, around the hotel, being around that all again has been really, really cool and I've absolutely loved it," she said.
During Covid, the team had been getting a lot of practice in among themselves but there was nothing like having international competition against England, the USA, Fiji. It was massive, she said.
"For the build-up for the Commonwealth Games this is exactly what we need. Today's loss is a little reminder that we've still got a lot to work on, and we're excited about that.
"I like losing in some ways. Don't get me wrong, I had losing with a passion, but when we lose you learn so much more from it. You're not complacent, you're always trying to find ways to be better," she said.
They were in a good place building towards the Commonwealth Games. They have another tournament in Toulouse in three weeks time.
New players had been given a test of play at international level and some new combinations, including Stacey Fluhler playing at centre, had been good.
They suffered too many knock-ons and too many turnovers at rucks, and they will need to hold onto the ball for longer. The side needed to quicken up their ruck ball also, she said.
The team were still trying to work out their game to be making comparisons with teams who had been back in the series for longer.
The Australians were looking fit and strong and were enjoying their play.
"Now they've lifted their game, now it is time for us to lift our game. We can't expect the same old Aussie [of recent years].
"It's nice to see they've got their fight back in them. We knew that was the case coming in. They had won all their earlier games," she said.
They were within 10 seconds of coming out on top but Australia gained a turnover and that proved the difference, especially when the New Zealanders conceded three consecutive penalties.
Woodman said she wasn't usually aware of milestones but team-mates had been counting down for her.
But, she said, 200 tries was a representation of how well the Black Ferns Sevens team had been performing over the past 10 years.
"I literally am the result of the all the work the girls do in the midfield. They do all the work and I am lucky enough to finish if off for them – that's my job," she said.