Regarding the Castle, it should only be located near water. And, in general, this idea was already touched upon some time ago, with the intention of creating a specific Castle for 5 heroes (even before they were released). The only problem is that it's not just 4 heroes, but also 2 followers – units that only live in water. I tried to address this by suggesting amphibian counterparts.
Now, regarding movement. Many of them can move freely on land and at sea. Sea creatures can be depicted as something in between sharks or whales with large paws. And the Kraken is a bit more complicated, but those who have seen "Wild World of the Future" will remember the land-based squid in the later episodes. I think they will be similar.
Finally, I didn't come up with all the units and the idea out of thin air. I heard something, but I didn't know where it came from. The rest is a product of my imagination. I will be grateful for any clarifying questions, and I will sketch out the abilities and other parameters of the units over the weekend