From the Super Mario Wiki, the Mario encyclopedia
Bowser's Factory, known as Bowser's Castle in Mario Kart Arcade GP and its successor, is the first course in the Bowser Cup in the aforementioned games, appearing before Castle Wall. Racers first enter the castle through an opening that resembles Bowser's head, not too different from Mario Kart: Double Dash!!. They go through a hallway and end up in Bowser's throne room, covered with lava. After this area, racers can see Thwomps (their design is very similar to ones seen in Super Mario Bros. 3) and a hallway with medieval armor for Koopa Troopas. Bowser Jr. can be seen, standing on his throne and cheering at players. The racers eventually leave the castle and arrive back at the starting line.
In Mario Kart Arcade GP DX, the course is remodeled and now goes under its current title, while Castle Wall would take the Bowser's Castle name for itself. Here, in the new racetrack, a factory section is added with Bob-ombs and King Bob-omb, and, after that section, there is a very large Thwomp that does not crush players due to two platforms preventing it from collapsing.