The Apple II core is not for the Apple II GS. It supports an Apple II+ with 128K memory and a Mockingboard soundcard (equivalent to an original IIe with the same soundcard) and yes it only supports .nib files. There is a small utility in the repository to convert .dsk to .nib.
What's missing to be a complete replacement is disk writes. It would be also nice to have a hard drive and better mockingboard support, but to be honest to just play games the core is more than good enough. Another thing that would be nice is support for Enhanced //e and multi language ROMs, but then again to play some games its not needed at all.
If it had disk writes I'd say the core is as good as an Apple II+ or unenhanced IIe. I still have my original IIe (pimped up with CF readers and PS2 keyboard) but the MiST/MiSTer are much more convenient to play. I'm still keeping my Apple though