ArchLinux + nginx + Passenger Rails app always pointing to localhost - nginx

Question

This is my first time using Arch based Linux environment (Manjaro Linux), and also Nginx.
I installed Nginx, opened http://localhost and it showed the standard Welcome to Nginx page.
Then I created 2 folders:
/etc/nginx/sites-available
etc/nginx/sites-enabled
In sites-available, I created a conf file named iima, with following data:
server {
listen 80;
server_name iima.merged.localhost;
passenger_enabled on;
location / {
root /home/path/redacted/public;
}
}
and then created a symbolic link:
sudo ln -s /etc/nginx/sites-available/iima /etc/nginx/sites-enabled/iima
Then in the /opt/nginx/conf/nginx.conf, I added:
include /etc/nginx/sites-enabled/*;
In the /etc/hosts, I added the following line at the end of the file:
127.0.0.1 iima.merged.localhost iima.merged.localhost
# I also tried below line while removing above line
127.0.0.1 iima.merged.localhost
Restarted the nginx server using sudo systemctl restart nginx (also tried with reload), but typing iima.merged.localhost always points to localhost page.
Am I missing anything? There are no error(s).log created in /var/log/nginx.
EDIT:
Content of /opt/nginx/conf/nginx.conf
#user nobody;
worker_processes 1;
#error_log logs/error.log;
#error_log logs/error.log notice;
#error_log logs/error.log info;
#pid logs/nginx.pid;
events {
worker_connections 1024;
}
http {
passenger_root /home/harsh/.rbenv/versions/1.8.7-p375/lib/ruby/gems/1.8/gems/passenger-4.0.45;
passenger_ruby /home/harsh/.rbenv/versions/1.8.7-p375/bin/ruby;
include mime.types;
include /etc/nginx/sites-enabled/*;
default_type application/octet-stream;
#log_format main '$remote_addr - $remote_user [$time_local] "$request" '
# '$status $body_bytes_sent "$http_referer" '
# '"$http_user_agent" "$http_x_forwarded_for"';
#access_log logs/access.log main;
sendfile on;
#tcp_nopush on;
#keepalive_timeout 0;
keepalive_timeout 65;
#gzip on;
server {
listen 80;
server_name localhost;
# server_name_in_redirect off;
#charset koi8-r;
#access_log logs/host.access.log main;
location / {
root html;
index index.html index.htm;
}
#error_page 404 /404.html;
# redirect server error pages to the static page /50x.html
#
error_page 500 502 503 504 /50x.html;
location = /50x.html {
root html;
}
# proxy the PHP scripts to Apache listening on 127.0.0.1:80
#
#location ~ \.php$ {
# proxy_pass http://127.0.0.1;
#}
# pass the PHP scripts to FastCGI server listening on 127.0.0.1:9000
#
#location ~ \.php$ {
# root html;
# fastcgi_pass 127.0.0.1:9000;
# fastcgi_index index.php;
# fastcgi_param SCRIPT_FILENAME /scripts$fastcgi_script_name;
# include fastcgi_params;
#}
# deny access to .htaccess files, if Apache's document root
# concurs with nginx's one
#
#location ~ /\.ht {
# deny all;
#}
}
# another virtual host using mix of IP-, name-, and port-based configuration
#
#server {
# listen 8000;
# listen somename:8080;
# server_name somename alias another.alias;
# location / {
# root html;
# index index.html index.htm;
# }
#}
# HTTPS server
#
#server {
# listen 443 ssl;
# server_name localhost;
# ssl_certificate cert.pem;
# ssl_certificate_key cert.key;
# ssl_session_cache shared:SSL:1m;
# ssl_session_timeout 5m;
# ssl_ciphers HIGH:!aNULL:!MD5;
# ssl_prefer_server_ciphers on;
# location / {
# root html;
# index index.html index.htm;
# }
#}
}