Fancy looking castles aren't actually unrealistic. You just won't find them on the frontier. The "fairy tale" castle is just a show castle taken to the extreme and Neuschwanstein is a real example of one (even if it was built a while after the medieval period). But less elaborate "show castles" were built.
As a general rule, the nobility will build what will impress people and in areas where defence is less of a concern, there will be more emphasis on how it looks, following the fashions of the time and culture. That's why you get the country villas of ancient Rome and the country manors of late medieval England. There's no reason why a very rich and powerful noble family wouldn't build such a show castle if they had the means and thought it would impress everyone else.
Errr, but anyway. I have been planning to do a castle plan of one I drew myself so this is inspiring. I can't wait to see how it turns out!