Last season it was no secret that the Irish were susceptible to the big play on defense and a big part of that was because there really wasn’t anyone to play the nickel back. So a lot of the time you had a linebacker lining up a receiver, which is not really a matchup that is favorable to the defense.
A nickel package gives the defense one more defensive back instead of a third linebacker. That DB gives the defense a more athletic guy who can cover the receiver in the slot or come up and play the run.