What is exactly wrong? They are just explaing they are reusing assets like the clouds/bushes, there is no huge philosophy behind that either than small castle = you're not finished with the level yet; big castle = you're entering the boss stage and are about to confront Bowser and finish the level.
My brain kinda hurts from your post though...
They're using words like "start" and "goal" incorrectly, and even have a picture of them doing it wrong.
Nakago: The castle at
the start is small, and the one at
the goal is big, but they're actually the same castle.
Tezuka: We took the top of the castle at the goal and used it at the start.
At the start of the game, the definitive "start", there is no castle whatsoever. After you cross 1-1, you encounter a "goal" which is stairs, a flagpole, and let's call it a "fort". Mario claims the fort with no effort, after the player uses the stairs to land on the flagpole. The level doesn't progress from small to large castles, it goes from zero to small (and is the only level in the game to do that).
At the start of 1-2, there is story continuity and Mario embarks from the fort he claimed at the end of 1-1, and he ends up at another goal, which is stairs, a flagpole, and another fort. The level begins and ends with two forts, and still no castle.
At the start of 1-3, Mario embarks from the second fort, and ends up and ends up at the stairs/flag/castle. This example is what is pictured above.
1-4 takes place inside the castle, and ends with a Bowser battle fakeout and "but our princess is in another castle", which is the "goal" in Mario 1 if you ask just about anyone.
Level 2-1 flips the interview statement completely around, because now the castle is the "start", and the fort is the "goal".
The only levels where the interview statement is true are 1-3, 2-3, 3-3, and so on. A better line would have been "The fortress sub-goals are small, and the larger castle goals are big, but they're actually made out of the same pieces, and the entire fortress is included in the castle design."