You need to remove nginx for a standard install. Discourse includes its own nginx, so you don’t need another (unless you want one for some other reason, which makes the installation more complicated).
The script attempts to connect to itself using your domain name. If the domain name points to your VM, then it should be able to contact itself via that hostname given that the DNS is correct and their is nothing else using ports 443 and 80.
If you bypass the check a bunch of times then you’ll hit limits on how many attempts you can make to get a https certificate from let’s encrypt.