i think its like, Castle Oblivion was founded by the Organization. Marluxia was the one who found it and noticed its awkward power and decided he could use it to his advantage. After discovering another Keyblade Master- Sora duh -, he planned to use the castle as a means to bring down Xemnas and take his mantle from him. But he needed clearance to go there and talked Xemnas in acquiring Sora for the Superior, when really Xemnas was completely fooled. Bringing Larxene, Vexen, Lexaeus, and Zexion with him, Marluxia planned to use Castle Oblivion and its impressive powers to rule over Sora's memories, but he needed to give Sora a reason to press on than just looking for Riku. - now im totally making this up now -Axel arrives in the castle and decides to assist their problem by agreeing to capture somebody who could lure Sora deeper into the castle. He found Namine, took her, and handed her over to Marluxia. In exchange, Axel wanted to be let in on Marluxia's true mission he suspected earlier. Marluxia and the others filled Axel in and, as Axel is with his acursed meddiling, found Vexen, Lexaeus, and Zexion an obstacle in his real mission commanded by Saix: to expose Marluxia's treachery. So, instead of terminating them, Axel framed the three with giving secrets to the other members about the plan. Naturally, Marluxia banished the three from the Castle's higher levels and to the basement levels, where their presence couldn't be channeled to the other members and they wouldn't be a flaw in the master plan.
So, to get to the point, Castle Oblivion only affects memories in a certain way. They either erase them or recovers them. Namine, however, just channels the power to erase certain memories and remember certain memories, even those that never happened, not even in a lifetime. As for the card system, I have no freaking idea about that. You're so on your own with the criteria cards.