This is possible. I'll try to give you a detailed breakdown of how I envision the powers, and edit Nemo's bio as needed.
Good, this is what I was aiming for. This means I can focus on Body Manipulations and how they interact.
Sludge is not supposed to be immunity damage. Think of a quicksilver blob and how it tends to slide to one side of a blade if you try to cut it - it's hard, but if you're precise enough, you can split it. Likewise, if you smash it with enough force, it'll break. Nemo stays and has to stay in one piece even in Sludge Form, or he'll be injured (as usual). Main advantage of this form is mobility.
Paper makes him hard to hit and allows him to float down safely (he has wings for actual flight), but otherwise doesn't really mitigate damage. Nemo doesn't have much offensive capability in this form due to being so light. Main advantage of this form is stealth.
Rubber retains some flexibility of Sludge while allowing for increased physical strenght and endurance. I don't imagine Nemo actually stretching that much, only to about 1.5 times his original lenght. Rubber makes him near-immune to blunt trauma, but cutting and piercing attacks still work.
Iron makes Nemo's limbs equivalent to weapons, having the highest offense, and protects well from all sorts of physical trauma, having highest defense also. It makes him heavier and slower, thus having worst mobility.
As I tried to explain, Life Return is not true regeneration. It doesn't allow Nemo to recreate lost tissue from nothing. If, for example, he lost a limb, he couldn't grow it back - he might be able to reattach it, but if his focus is broken, the limb will fall off again.
I can't really see him taking on a whole guild. Especially the canonical one has way too many powerful elementalists who could obliterate Nemo before he even got to range.
Another alternative: Nemo can combine Titan Form plus one other form with Eldritch Soul, but can't change those forms without dispelling his Take Over first. In addition, using Life Return forces him to deactivate any other Body Manipulations.
I find Mirajane a poor point of comparison, because while her Take Over is fairly bland, she has loads of unrelated abilities, namely Dark, Sleep, Water and Transformation magic. The second-to-last allows her to lift and manipulate a whole river, and the last allows her to change her appearance and clothes to those of other people, or even other species. Nemo doesn't really compare to that.
I don't know how typical Mirajane is for S-rank, or what is the treshold for being S-rank, but while Nemo's shapeshfting might be more sophisticated, he loses out pretty hard in offense and magnitude of powers.