The castle I have built is in the open world, other than interiors of course. I know with interiors you can just duplicate the cell, rename it, and begin adding or taking away objects and having the interior change when a quest stage is reached.

But how would I do this if the castle is in the open world? It will be like Kvatch Rebuilt for those who have played it, the rebuilding aspect that is.

I am kinda stuck in one place right now and the answer to this depends on progress Thanks guys

Edit: I just want to know if it is possible, not asking how to do that, I am not expecting that much help.

Just use disable/enable with scripts everywhere. Lists can make the job a bit easier...
I am planning to do a similar thing

You mean you want an "exterior" interior, like Whiterun, Windhelm, Markarth and Solitude? Those are actual worldspaces that have the Tamriel worldspace as a parent and as such inherit the LOD etc.