You make some very good points. I didn't even get that far in my thinking. I stopped at would this be good for the player/Nelson. My answer is hell to the no.
After the first two weeks of fall practice 3rd team get little to no reps. As a result Nelsons reps have been almost non existent since early/mid August. He received no playing time in the easier part of the schedule. It would be extremely unfair to send him out there against one of the Big Ten upper football programs in not only his first start but his first time on the field in a college game.
The rule of thumb is it's always better to play as a 23 year old rather as a 18 year old. But thats not all; for the sake of this conversation let's assume he is successful, what do you do with the other QB's? You can't put Nelson back on the bench after burning his redshirt and costing him half a season? Do you bench Gray in his senior season? What about Shortel? If Nelson playes poorly (which is likely), it's to be expected; the kid will have had little to no development.
If Kill does this he OWES Nelson because Nelson will be taking one for the team/Kill. Like I said, if this were to happen someone would be royally screwed; I refuse to believe Kill would do this to one of his players.