I don’t know how to help you with your Nginx configuration but I can suggest you a more easy and automated setup, that I use for my Video Notes web app running on DO with Traefik and Docker.
I have automated the creation of the server with Traefik, Docker and LetsEncrypt via a cloud-init file that you upload when creating the dropplet:
The cloud-init file will also do a lot of security hardening during the creation of the server.