Pretty much agree with all you've said, with a subtle adjustment. I think he's earned the right to be at the top of the pecking order as the 14th man, which is why it's significant not to burn his option this year.
As in, plan the roster so that you don't need Castro, but recognize there will be very few days when you don't have at least one player on the IL. If you plan with Castro as your No. 13, he will most often be your 12th or 11th.
I think he fits the "long-term plan." As in, the Twins emphasis on position flexibility means that their long-term plan will almost always include a place for a Castro-type in his Arb years, preferably with an option. A guy like this is disposable, not in the sense that he is bad, but in that that he will be disposed of when he reaches free agency, replaced by someone with a similar profile. For 2024 and maybe even 2025, he's the leading candidate for this role, but he'll be replaced by Castro 2.0 in a couple years.