Currently I'm on Chapter 8 and Nils is probably the worst guy I have--it seems as though he can't wield any weapons, which is surely something I am personally missing. What makes him so good?

he dance/sings to the character,making he move/attack again so he can be very good for characters like Hector and Oswin,that destroy everything in the way.

it's not good as in fighting worthy, it's good as in support for you team... they have the ability to get people to move again, which is helpful for double healing, or double attacking... As well, they'll get rings which boost a stat, such as having some weaker units OHKO enemies...