I think it's important to see the Castlefield corridor issues as two separate problems: platform use for Piccadilly, Oxford Road and Deansgate, and junction conflicts either side of the corridor. The Northern Hub project to extend Oxford Road platforms and add another two platforms to Piccadilly is designed to solve the former, but does nothing about the latter. And any solutions with the aim of increasing capacity through the corridor such as ATO will not achieve anything until the latter problem is dealt with.
There are many historical reasons for how Manchester's network was formed going back to the first-ever passenger railway but we now have a network that is supposed to be the hub for the North West and one of the major hubs for the nationwide network, but is not much more than a massive mess of flat junctions. Recent projects such as the Ordsall Chord may have helped increase connectivity for passengers coming in and out of the city and made better use of rolling stock, but has had a negative impact on the network's reliability and resiliency. Neighbouring areas like Liverpool, Sheffield and Wales have also been negatively affected as they rely on Manchester to provide connections to other areas.
NPR seems to be the closest to providing a long-term solution, with a new corridor connecting Leeds with Liverpool through Manchester that should free up capacity for local services but the more severe bottlenecks will still remain.