Learn Croatian: Stari kralj je počivao u dvorcu. - The old king rested in the castle.

Removing je changes the verb from the past tense to the optative mood, which expresses a strong wish or curse. While je počivao is a factual statement meaning he rested in the past, the bare l-participle počivao is used for fixed wishes like Počivao u miru! (May he rest in peace!).

Could I use se odmarao instead of je počivao to say he was resting?

Yes, but there is a stylistic difference. Odmarati se is the everyday verb for relaxing or taking a break. Počivati is a bit more elevated or poetic, often used for resting peacefully, lying down quietly, or in the context of a final rest, making it a perfect fit for a storybook subject like a king.

Why is the word for castle dvorcu instead of dvoracu?

The dictionary form is dvorac. It contains a fleeting a (nepostojano a), which is a vowel inserted to break up consonant clusters at the end of a word. When you add the locative case ending -u after the preposition u, the a drops out because it is no longer needed for pronunciation.

Why does the adjective star take the -i ending here?

The -i ending marks the definite form of the adjective (stari). Because the sentence is about a specific, known subject (the old king) rather than an unspecified one (an old king), Croatian requires this definite ending for masculine adjectives in the nominative case.