Remember the film Baron Munchousen, or that rather depressing, but visually amazing film, What Dreams May Come? Those fantasyland places where any, and everything, can happen would a good starting place for where I will build my castle. The castle needs to be grand, wacky, magical, Harry Potter-ish most likely. The picture on the post card with painted skies, cotton candy clouds, and reflecting waters stands in for a lovely location. I'll go with that.
And my favorite room? Well, I would have to have a perfectly circular round room with an enormous billowy couch curving around the entire wall (probably purple or magenta couch, but who knows why), with floor to celling book shelves filled to the brim with any and ever book imaginable. The glass roof of the room opens to the sky. OH, and it also has a hidden secret passage way leading to a killer, fully stocked kitchen.
That was fun.