Using Phrazer with ReWire means that the audio output from Phrazer is routed into Cubase, not a sound card. Use ReWire if you want to share a single ASIO card between two applications such as Phrazer and Cubase. The audio output from Phrazer goes into Cubase as an audio track, and the output from Cubase goes to the sound card. Inside Cubase, you can treat the audio from Phrazer as any other audio track - add VST effects and automate the mixdown, for example.
To use Phrazer with ReWire, you first need to make sure that ReWire is installed in your system. The 'ReWire' extension should be in your 'Extensions' folder. Next, copy the 'Phrazer ReWire' extension from this folder into your 'Extensions' folder. Finally, change the engine type on the 'Engine' page of the Phrazer preferences to 'ReWire'.