If most of the castles in Westeros are hundreds if not thousands of years old, does that mean that the art and craft of castle building has diminished in Westeros? Why aren’t there more new castles being built?

I don’t think that’s accurate. There are a handful of ancient famous castles that are that old – Winterfell, Casterly Rock, the Eyrie, etc. – which happen to be very old, and we spend a lot of time in and around them in ASOIAF.

But there’s a lot of more recent castles. And I would imagine castle-building is kept up through maintenance, repairs, improvements, etc.