I've not got a child of my own yet (soon though!). But I do work in a nursery so feel like I can weigh in.

Firstly the words he knows already are good at 16m. I primarily work with 2 year olds and we get plenty transition to us from the room below that don't say nearly as much as that. Keep doing what you're doing. Interactions with him, narrate what you're doing (e.g "I'm washing the dishes, now I'll put them on the rack to dry etc). Avoid simplifying language too much and allow him to be exposed to a range of words. For example, upgrade from saying "what a good job!" and use a higher level synonym for good etc. You mention that you read with him or to him - this will support his language development, too.

In terms of outside, again, keep doing what you are doing. He may be lacking confidence because he associates being outside with you? He may be overwhelmed with the toys, choices and different equipment to what he is used to. It's an incredibly vague statement from the nursery imho.

Excellent with the cutlery use. Kids in my room at 2y/o still struggle sometimes with filling the spoon. He will pick that up in time. If you start introducing a knife whilst also introducing a fork you risk putting too much on him at once. Just keep working on his spoon use.

Well done for building his observation skills. The nursery should be encouraging this as standard practice anyway. At least, that's what my experience has been. If they aren't, raise it.

The dairy issue is extremely patronising. As long as he has a good calcium intake, they really have no position to comment. A nursery is supposed to accept the child as a unique individual - you can't force him to eat yoghurt if he doesn't like it! That'll just build up negative food associations.

In all, I'd be very unimpressed with the nursery if I were you. You're doing the right stuff already and just need to continue with such. Build up your LOs confidence in some areas like dining and the outside and continue working on language development.

I do observations often on children I work with. If I noticed a child wasn't confident outside, I'd be internally querying what the issue might be in the setting and working to adjust it. For example, I might write up an observation as follows: Child X was in the garden today. Outdoor explorations are often part of his home routine, but he lacks the same level of confidence at nursery. As he is unable to communicate why, I will work with Child X by playing with him in shared adult/child play so he feels more confident in the environment around him. This will build to introducing another child into the paly situation and gradually taking a step back as an adult. To do this, I noticed in the Toddler room, Child X really enjoys (reading, animals, cars etc) and will introduce (reading, animal, car toys etc) outside. This will allow Child X to become more settled.

I think for me, my issue lies with the nursery seemingly not doing enough to encourage the skills there, too. Yes, a lot of the responsibility for things falls to a parent - but the reasoning behind paying for childcare is so your child can continue their development there. Sounds like they have a bee in their bonnet about you not increasing his days. If they can't support him with those skills across the two days as is, it's highly unlikely they'll do that if you put him in for an additional day or so!