Hill forts are much older than castles, dating either from the pre- or immediately post-Roman periods, and there's a gap between the time the last of them was built and the first of the castles (which were in any case initially Motte and Bailey structures far more rudimentary than later castles).
In intervening period, it was towns that were fortified (the Burghs, e.g. Lincoln), usually with earthen banks.
What is a hillfort? A hillfort is a ditch and banked enclosure on a point in the landscape, usually on a hill. They appear at the very end of the Bronze Age in Britian.
What you probably meant was the Norman motte and bailey?
The first Norman castles to be built were strongholds built following the armies of William the Bastard. Following the conquest, William rewarded his barrons by gifting them Saxon land. Their lordships entitled them to construct castles. The vast majority of these castles were motte and bailey castles. The motte was an artificial mound of earth with a timber tower placed on top. Surrounding the motte would be the bailey, which was an earthen banked enclosure. Some 1500 castles were built following the conquest. The castle became a symbol of the office of lordship and having the favour of the King. Therefore the Norman castle acted as a strategic point for gaining and maintaining control over hostile territory.
The first castles to be built in stone were Keeps, free standing towers with a highly fortified core. The earliest example of a Norman keep is the white tower of London built in 1070, constructed as a symbol for Williams rule over England.
By the 12th defense shifted from the core of the castle to the outer walls. Resulting, in part, from changes in warfare with the development of siege weapons such as the trébuchet. The tower was moved from the centre and placed on the curtain wall. This enabled the defense of a larger space. By this time the castle may have possessed several halls, chapels and kitchens. By the 13th century castle development concentrated on the improvement of the domestic residences within the curtain wall (basically the barons showing off their wealth to one another)
So, in short. Wooden castles such as motte and baileys being relatively easy to construct could not fulfill their function with new developments in medieval warfare.
Edit: Removal of repetition and waffle