"This castle is beautiful."
Translation:Dieses Schloss ist schön.
This sentence is only correct if you allow for the improper use of English. "Dieses Schloss ist schön" really translates to "This palace is beautiful." If you wanted to say "This castle is beautiful" you would have to say, "Diese Burg ist schön." Castles are fortifications, palaces are, well, palatial luxuriant residences. They are not interchangeable.
It’s not as clear-cut as you seem to make it out to be, I think.
Windsor Castle and Balmoral Castle are residences of the Queen, for example, yet they are called “castle” and not “palace”.
A residence may be fortified.
Schloss is mostly about being a residence, and may be fortified like a Burg or luxurious like a Palast or Palais.
German doesn't have a word burg, and the word schloss means "closed", not "castle".
You can use either of the words Burg or Schloss (capitalised -- they are nouns) here, as long as you use the appropriate gender forms of the demonstrative: Burg is feminine, so diese Burg, while Schloss is neuter, so dieses Schloss.
dieses Burg or diese Schloss would be simply wrong.
If you have a question about why your sentence was not accepted, please always quote the entire sentence that you wrote. Often, the problem is in word order or with the gender of an adjective or article or the like, rather than the word that you think is the problem.
Das Schloss ist schön = correct (The castle is pretty) Der Schloss ist schon = incorrect ( Der should be Das in this case.... And if we ignore that it is still wront because meaning od what you wrote is : The castle is already)
schon = already schön = beautiful/pretty
Der Turm ist schön = The tower is pretty (correct) Der Turm ist schon = incorrect ( meaning: The tower is already)