Were he actually Nephalem, it would have been clearly stated as such. In fact, he is still referred to as an angel several times and when you reach heaven Imperius referrers to YOU as nephalem, and separates Tyrael from these statements.
Also, presumably if he were Nephalem he would also have no "fate" as Ithereal says and would be free to kill Diablo himself.
Mmm, well I assumed it was part and parcel of being banished to Sanctuary. Like maybe a mortal form imprisons him there. I mean, it had to be something corporeal because he doesn't seem to normally have a body, and I guess they went with human because Archangel Tyrael the Fetish Shaman might've been a bit hard to take seriously. Note that at the end he reassumes his Angelic duties but "as a mortal", whatever that means.
Also, presumably if he were Nephalem he would also have no "fate" as Ithereal says and would be free to kill Diablo himself.
You sure? There doesn't actually seem to be anything inside those hoods and armour...