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The topic of wildly diverging fantasies... all discussions mainly boil down to uniting neutral creatures under one banner:smile38:
Neutral creatures are neutral for a reason, so they don't have any kinship or affiliation... I've always been surprised why an army consisting entirely of neutral creatures has +1 to morale (as if it were a full-fledged warring side). What do hobbits have in common with bandits, and azure dragons with trolls? In my opinion, a Castle is primarily a union of creatures that are close in meaning. They share a common habitat, a similar way of life, where they all complement each other rather than conflict.
As for removing Castles from Heroes... well, if it's really necessary to remove them for some reason, let it be Conflux. It's somewhat bland and uninteresting. The creatures are inadequate. So what if there are five types of elementals? There's no originality. For example, the Dungeon – all the creatures are so different, they don't resemble each other at all. Or even the Castle – although all six levels are humans, they don't look "the same," like the elementals. Although even Conflux shouldn't be removed – it has a pleasant architecture and original heroes. For that, it can stay :D
But in general, a water-based Castle is definitely needed in an expansion. Heroes appear on a small ship right after being hired, and you can only sail into the city (those who like "walking on water" will be turned away). In the city, you need to place various resource generators – because water-based factions won't have many mines. The creatures – well, that's not so important. There were already enough ideas in the WOG forum, I won't repeat what others will say better... take mermaids, sirens, tritons, sea monsters, Scylla (definitely make this a counter-argument to the Hydra), add some more mythological creatures to taste, sprinkle generously, and serve it up :)
Personally, I would like to see a couple of Castles (one wouldn't be enough) with characters from Indian mythology. Rakshasas, nagas, gandharvas, apsaras, and other fun guys. Indian myths are very positive, even if they tell about cruel wars and bloody battles. They are life-affirming.