Well, they are only 11 miles away from each other, Kastleruth (Castlerotto) is the quainter of the two, it is the 'undiscovered' village of Rick Steve from decades ago and is hardly 'undiscovered' anymore, it's famous for its village bell that rings ever hour. Kastleruth is considered the 'gateway' to the Sieser Alm since it sits closer to it than Ortisei (but there is a chairlift to Sieser Alm from Ortisei too). I would not say there is a lot of difference scenery-wise between them being so close to each other and sitting basically in the same valley.
Should you try to do both locations? With 5-7 days you probably will need to, that's a lot of time for both, let alone just one of those places! Ortisei and Kastleruth are just small towns/villages, they both are pretty central places for people to base themselves to explore the area they sit in which is the Val Gardena. I would think a good amount of people staying in either of those towns are there to explore the Val Gardena area itself and not just the town.
Ortisei will be more central to more things, Castleruth further to the west will be more central to visiting only Sieser Alm.
For ideas of what to do there besides walking around the villages... the two biggest attractions are:
1) Near Castleruth the mega attraction is the Seiser Alm, of course, is a huge tourist draw for hikers (Maybe overhyped for tourists but to each their own), it's also a fun experience to rent E-bikes and explore it, you can rent them at the base and take them up with you or rent them at the top. (You can also stay in the smaller village of Siusi Seis just a couple of miles south of Castleruth, and walk to the tram that takes you up to the Seiser Alm)
2) In Ortisei the main mega attraction is the Seceda, taking the tram up to the top, hike around see the amazing scenery, drink and eat at the different rifugios, you can walk down into the nearby village of St. Cristina and take the bus #350 back to Ortisei if you are a tiny bit adventurous.
There are lots more things to do in the area you are looking at which I'm sure others will give you details of.
A good way to start figuring out what you want to do is google image search the things I named here to see how special they are - Seiser Alm, Seceda...
