Thanks everyone for posting your theories. However, I took a look at the Japanese dialogue of this game, and I must conclude that, once again, the source of all the confusion is the localization. It's because of the localization that we English speaking fans ended up making a lot of wrong assumptions about the story. I realize now that in reality, PoR's story is actually quite simple. Let me explain.
I've formatted my post so the normal text is the original Japanese, the blue text is my English translation, and the green text is official translation which I've included for comparison purposes.
At the beginning of the game, Charlote says the following:
これだけの魔力を放つ城。私が本で調べた悪魔城以外考えられない
A castle that emits this much magical power. It's unthinkable that this is anything other than the demon castle I've read about in books.
This castle is pulsing with dark magical power. I can't imagine it's anything but the castle of Lord Dracula that I studied in the books.
This might seem like a throwaway line at first, but this is going to be important later in the story, so let's keep this in mind.
This brings up to the first conversation with Wind:
Wind:
それともう一つ話しがある。ここの城主の事だ。
Oh, one more thing... Regarding this castles's lord.
Charlotte:
ドラキュラの事ね。それなら本で…。
You mean Dracula right? I've read books about him.
Wind:
ドラキュラは城主ではない。
Dracula isn't this castle's lord.
Jonathan:
どういう事だ?ここは悪魔城じゃないのか?
What do you mean? That's why they call this "Dracula's Castle".
Wind:
悪魔城である事は間違いない。だが、今この城を支配しているのは、ブローネルと言うヴァンパイアだ。
This without a doubt the demon castle. However, the one who is currently ruling the castle is a vampire called Brauner.
It is indeed Dracula's Castle. However, the castle's Lord is a vampire by the name of Brauner.
Charlotte:
そんなの聞いた事が無いわ。
I've heard nothing about that!
Wind:
知らなくて当然だ。最近発見されたヴァンパイアだからな。奴は絵に魔力を込めその力を行使する。この城の中に、必ず奴の絵があるはずだ。まずは、それを探せ。
It's because he's a recently discovered vampire. He puts the magical power (of the castle) inside his paintings and wields that power. You will undoubtedly come across these paintings in this castle. Search for these paintings.
As one would expect. His identity has been kept secret for years, after all. He infuses magic into paintings to increase his power. You will undoubtedly come across these paintings in this castle. Search for these paintings.
Charlotte:
絵を使って、城の魔力を自分のものにしてるって事ね…。でも、ドラキュラじゃないなら、ひとまずは安心よね。
He's using the paintings to make the castle's power his, isn't he? Still, he isn't Dracula, after all, so we're safe for now.
The official translation is pretty close but whoever translated seemed to have overlooked that the magical power/magic (魔力) that Wind is talking about is the magical power emitted by Dracula's castle. This line is absolutely crucial to understand what Brauner is doing. His paintings are like sponges that absorb the magical power emitted by Dracula's castle. Because the magic emitted by the castle is stored inside his paintings he is able to use this power for his own purposes.
Charlotte:
この絵…。すごい魔力…。
This painting... Its power is incredible!
Jonathan:
これが、ウィンドの言ってた絵か…。
Must be one of those paintings...
Charlotte:
間違いないわね。… 分かった。
Without a doubt. Hm... I've got it!
Jonathan:
な、何が?
Care to share?
Charlotte:
この絵の役割よ。ブローネルは、この絵を使って悪魔城の魔力を制御してるのよ。
This paintings function. Brauner is using is to seize control of the demon castle's magical power.
This paintings function. Brauner is using it to control the power of this castle! *
Jonathan:
なら、早いとこぶっ壊そうぜ。
Well then, let's hurry up and rip it to shreds!
Charlotte:
無理。やるだけムダよ。私が見た感じ、この絵は呪法強化理論に基づく、擬似空間的多層結界ね。 魔法力学的に言うと…。
Impossible. Anything we do will be pointless. From what I can tell, based on the theory of black magic reinforcement, this picture is a multilayer quantum-space barrier. A kind of paranormal phenomenon.
Impossible. Anything we do will be pointless. From what I can tell, based on the theory of curse amplification, this picture is a multilayer quantum-space barrier. A kind of paranormal phenomenon. **
Jonathan:
あー、もうちょっと人間の言葉で頼む。
Uh, okay... And what does that mean in human language?
Charlotte:
…。つまり、城を制御する魔力を囲むように何重も壁があると思ったらいいわ。で、絵の部分に当たるのは一番外側のほんの一部。 壊したところで復元するし、まったく意味が無いわ。
...In other words, think of it as a series of walls that surround the magical power which is controlling Dracula's castle. The painting itself is just the outermost wall. As soon as you break it, it'll regenerate. It's unbreakable.
... In short, think of it as a series of walls that surround the magic controlling Dracula's Castle. The painting itself is just the outermost wall. As soon as you break it, it'll regenerate. It's unbreakable. ***
Jonathan:
じゃあ、どうする?
How convenient. So now what?
Charlotte:
私の魔力を同調させて絵の中に入り込むの。そして直接、城を制御する魔力を封じるのがベスト。危険度は高いけどね。I'll align my magic witht he painting's so we can enter it.
That'll be the best way to put a stop to the magic which is controlling the castle.
I'll align my magic witht he painting's so we can enter it. That'll be the best way to circumvent the castle's magic. the risk is quite high though. ****
Footnotes:
* What Charlotte says here is a conformation of Wind's earlier line about Brauner infusing magical power (which is emitted from Dracula's castle) inside his paintings to make that power his own.
** In my opinion, a more accurate translation would be "black magic reinforcement". In other words, a method which makes it more difficult for a magic spell to be undone my someone else by hiding it behind a series of barriers. (Brauner's paintings).
*** The magic Charlotte is talking about is refering to Brauner's magic, not Dracula's.
**** "封じる" can mean "to seal" but it can be used figuratively to mean "to put an end to something". Just like English, there are tons of verbs in Japanese that are used figuratively. In this case, the usage is clearly meant in a figurative sense because we never see Charlotte and Jonathan actually sealing away any magic.
After Charlotte and Jonathan defeat Dullahan, there is the following exchange:
Charlotte:
ふーっ。今のモンスターが魔力の核だったみたいね。
Phew, that monser just now seemed to be the outer husk of the magic (inside the painting)
Phew, that monster just now seemed to be the core of the magic energy.*
Jonathan:
これでブローネルは城の力を使えないわけだな。
Meaning Brauner can't use the castle's power now?**
Charlotte:
いえ、ちょっと違うみたい。確かに城を支配する力は、少しだけ無くなったみたいだけど…。
No, not quite. The power that his controlling this castle has decreased a little bit, but...
No, not quite. His control of the castle's power has decreased a bit, but...***
Jonathan:
少しだけってどういう事だ?
"Decreased a bit"?
Charlotte:
たぶん、絵はこれ以外に…。
I think there's something else...
Footnotes:
* "核" can mean "core" but that doesn't really explain anything so I think the translator choose the wrong definition here. It can also refer to the pit inside certain fruits which encompasses the seed (hence "outer husk"). That already makes way more sense because the bosses inside these paintings are supposed to act as a last line of defense against anyone who enters the painting in order to destroy the magic contained within. In fact, maybe "last line of defense" would work the best as a translation.
** Just to be clear, Jonathan is refering to the magical power emitted by Dracula's castle here.
*** This line is refering to how Brauner's magic has decreased a little bit. The official translation made things unnecessarily complicated by translating it as "the power to control the castle".
With the confusion caused by the localization (mostly) out of the way, I can give a short and simple summary of the story:
"Dracula's castle is brought back during WWII by Brauner. However, the only thing he cares about is harvesting the magical power that Dracula's castle emits. He stores away this magical power inside his paintings which allows him to harness that power himself and become more powerful. He wants to use this power to destroy humanity because of what happend to his daughters during WWI. "
There's still some translation wackiness near the end. Let's take a look in order to wrap this up completely.
Death:
アトリエの絵によって、ドラキュラ様が蘇るべき玉座の間を切り離すとは…。考えたものよ。だが、これで我が主は蘇る。ははははは
Cutting off the throne room where Lord Dracula is expected to revive through means of his atelier painting... A clever plan. Alas, now I can revive Lord Dracula! Ha-ha-ha-ha-ha!
The studio painting was cutting off the throne needed to revive Lord Dracula. A clever plan. Alas, now my lord can be revived! Ha-ha-ha-ha-ha!
This line was very weirdly translated. The way Death is talking here is that it's common sense that Dracula revives in the Throne Room. However, nowhere is it mentioned the Throne Room is needed to revive Dracula. That's just making things unnecessarily complex. My take on this is that when Brauner revived the castle, he quickly sealed away the Throne Room because he knew Dracula was going to show up there, trapping him there. What I'm not sure of is if Dracula is trapped there from the very beginning of the game or if he revived in there near the end of the game and discovered he was trapped there. Anyway, it's not hard to understand the gist of it.
One final thing:
Charlotte:
この先から、ものすごい魔力を感じるわ。
I sense terribly powerful magic up ahead.
Jonathan:
ジョナサン
この先に城の力を取り戻したドラキュラがいるって事か。
Up ahead is Dracula who has reclaimed the castle's power.
Meaning Dracula's that way, restoring the castle's power?
This line simply indicates Dracula regained the magical power that Brauner stole from the castle.
This is just my take on the story, of course. I'm not claiming it as absolute gospel or anything. Too bad Koutei isn't here. I'm curious whether or not he concurs with this.