If you bowl a side out for 120, you can't be that bad a captain in that match. I feel batting on in this instance will do more harm to the Aussies, then following on. If they score 300 amd England chase down the 70 runs and win, I don't think it's as deflating as bowling for three days, and hopefully having to chase over 500 and only getting 250.
Also I think conditions play a part here, it's mean to be like today for next three days, great batting conditions, and most Aussie wickets were stupid shots. If they played sensibly they would have got more. If it was overcast and swinging round corners, I'd enforce follow on, but not today. Think batting is better choice. After watching the highlights again, neither side is making the ball swing round corners etc, most wickets came from stupid shots ams just pressure bowling. With the ball not doing much, bowlers work harder. Rest ours, run Aussies into the ground instead.