"nestled by" is a correct and usable phrase in written English.
You can use it when you are trying to describe something that is close to or surrounded by something else. For example, "The small village was nestled by the rolling hills."
Their target was a pinkish cloud, nestled by the upper left of the cluster's core.
His Germanic castle, nestled by an Alpine lake, constrasts with the glitter of a Renaissance ballroom.
"He went there, he embraced Islam," said his widow, as their daughter, Imari, 7, nestled by her mother's arm.
Peasants wear lederhosen, the nobles are in stylized Renaissance dress, and the castle is nestled by an Alpine lake.
This makes the inhabitants of the remote village of Xiajiang, nestled by a river amid bamboo-covered hills in the eastern province of Zhejiang, highly unusual.
Most residents of the building, nestled by the Garden State Parkway in a working-class wedge of East Orange, were subletting their apartments from the condominium owners.
Home to about 70% of the Maltese fishing fleet, the harbor is like a bowl of beautifully-wrapped candy, with scores of vibrantly-painted crafts in hues of yellow, red, blue, green and brown, all nestled side-by-side.
He prizes the area's diversity: jewel-box boutiques and shiny skin-care spas nestled cheek by jowl with Latino-run pawnshops, kosher delis and beauty parlors with old-fashioned hair dryers in full view in the windows.
Spiked with tiny moments of visual joy -- lovers' candy-colored sneakers nestled side by side, a bathtub filled with rose petals in a near-derelict warehouse -- "Nana" raises issues of pride and ambition without sacrificing its charm.
In those days middle-class audiences — alarmed and titillated by the loud groans of a sexual counterculture it couldn't ignore — found reassurance in stage and screen fare that skirted the wild side but wound up nestled down by the family hearth.
The shiny pinks and greens of Chas Rader-Shieber's production of Handel's "Flavio" are a nice complement to a score that presents arias nestled side by side, bright and sweet and varied as the offerings in a box of candy, linked by premises as ordered and flimsy as cardboard dividers.
