As the other comment said, no need for NGinx unless you're dealing with external assets you don't want to add to your project structure.
That said, I will say I run my Blog on Play 2.1 (RC2 IIRC) and 512MB means I have to set some tuneables to limit the max memory to 384MB. I haven't figured out how to get those to work with 'play dist' either, so I got it running by cloning the source and installing Play locally. Which isn't much fun.
I'm sure with a little more digging I could figure it out. That said, the default limit of 1.5GB is probably there for a reason. It seems well suited to EC2's m1.small instance (1.7GB).
Considering the in-memory caching, I'd just pony up the $44/month for such an instance for anything more than my personal blog.