That 16mm will not be nitrate unless it's Soviet stock (highly unlikely and very rare); it will be diacetate (smells like mothballs) or acetate. The only home format that used nitrate is 17.5mm, which was slit 35mm; all others as well were diacetate or acetate.
Now, that's not to say it won't burn, but it won't burn explosively like nitrate.
The big "key" is for winding the spring motor and it's probably over-wound or left wound for years and has frozen. The lower lever is to switch between continuous run and single frame shooting.
No, you don't have to have the reels installed for it to run. Should you ever get it freed-up, never run it faster than 18-24 fps without film in the camera, as it will damage the mechanism.
Check the sprockets; more than likely it will required double perforated (perfs on each side) film. Do not attempt to run single perf film or it will destroy the emulsion.
Neither the projector or the camera are particularly rare, but they can be fun to use IF you can get them going. These typically required a lot of penetrating oil squirted in the oiling ports and to sit for a long period before they will free-up; if they do at all. If you can free them up, sewing machine oil is a good oil to use to lubricate the mechanisms.
The film itself can be much more valuable than the camera/projector combined IF it has interesting or historically important images. If they are cut-down commercial compilation reels, then they are little value other than for entertainment purposes.
Good luck.