Firstly, I’ve found that the castle you gain after defeating level 5 is the best to use for this game. It’s a dense castle, so it forms dense rubble with its pieces as they come down. Since the castles don’t rebuild between levels, this is perhaps the best measure of a castle’s quality for defense.
Placing your treasure: Always place your treasure at a 90-degree corner. Do this because it’s behind a thin wall, which is harder to hit accurately. Further, the blocks that are open to Skarl’s attacks will tumble overtop of the treasure, which makes it harder to move. I usually place mine outside my castles, but that’s up to you.