As one of the older kids at the orphanage, Wolfwood has a big responsibility streak towards the others. We never do find out how long he'd been there, what his history was that he ended up there.

Nico is just a shortening of his name, yeah - 'nii' or 'ani' is older brother, so in effect all the kids at the orphanage are calling him 'Big brother Nick'. The role seems to suit him really well.