@Chights47,
You say that "nothing" is the opposite of "something". But I do not agree. The opposite of 0 (as "nothing" is often symbolized with) is not 1. "Nothing" is the absence of "something" they way I see it. You start with "thing" and realize you have zero amount of that thing and add the negation "no" to it. It is not an opposite in the same way that left is the opposite to right.
And without "thing" in the first place, "nothing" doesn't have meaning. I honestly cannot think of any scenario where the word "nothing" is used without referring to something specific.
"What do you have in your hand?" - "Nothing".
"what did you say?" - Nothing".
"In terms of biologic reproduction, what happens when to people of the same gender have sex?" - "Nothing".
Seems to me attacking the issue from the other end is a bit like the rather comical situation in Douglas Adams' Hitchhiker's Guide, where they have the answer to life, the universe and everything. It's 42, but they can't make sense of it, because they don't have the question.
And regarding the argument, he may mean what you say in 3), but I still say that it isn't a conclusion of the premises, which means it is not really an argument. But what is "in nothing"? It seems to me the idea of "absolute nonexistence" is a metaphysical fantasy.It is the same mental trick we perform when we say "the universe is everything" and then proceed to ask "but what is outside of the universe (everything)" simply because our grammar, our language, lets us pose the question grammatically. But if we have already defined the universe as everything then that is just what it is, just because our minds can conceive of "beyond it" doesn't mean that it is a valid proposition.
It also does not mean that beyond "everything" there is nothing. That problem is false, there is no answer because it's a trick words play on us.
"In nothing", as you said earier implies that "nothing" is a state of being. I don't think that is the case. I am now, and when I die and my body has completely disintegrated I am not a being "in nothing". I am simply not a being anymore. Perhaps my mental activity has disengaged from my physical form and continued somewhere else, I don't know, and I think no one knows. I rather think not, and count it a blessing. But my physical form has disintegrated and become part of a whole lot of other physical forms. The energy that was mine to command for a time is simply redistributed, not gone.