I think it's ok. Using the nominative case here is ok if he was a cheerful man for all of his life. Another example:
- Он был рабочий - He was a working man (for all of his life)
- Он был рабочим - He was a working man (at some time of his life)
OK, some cooked-up "explanation": in Russian Instrumentalis is called Творительный (creating). So something to do with creating and existing?
Also somehow owning/possessing/having for skills/features rather than objects
For example, you can not say У меня есть телекинезис or Я имею телекинез, cause telekinesis is not a thing that you have. It would be Я обладаю/владею телекинезом, in Instrumentalis. Another one, Я владею русским языком - "I own Russian language" :D Я знаю русский just means you know it and a lot about it, and the former one either means you're a native speaker or a genius foreign master of Russian.
So, being a cheerful man is like a feature/skill...
1) My feeling of Nom/Inst here is:
Мой пара был инженер --> My father is dead. He was an engineer.
Мой папа был инженером --> He used to be an engineer. For some period of time (which can be all his life or less). No info about him being alive or dead in the sentence.
2) Interesting question. Why exactly Instrumentalis in this pattern. No idea :D
In Polish they always use it in the present tense, never Nominative. Мужчина = Mężczyzna (Nom.). Я мужчина = Jestem mężczyzną (Inst.)
I had the same question, then I re-read the "tips and notes" for "Instrumental Case".
It is used alone with some verbs of “being”, “becoming”, “seeming” (https://www.duolingo.com/skill/ru/Instrumental-Case)
быть ("to be") is one of the verbs of "being" then. ^_^