What are Nick's morals that could allow others to confide in him, and how his morals have the effectiveness of Nick as the narrator?

Nick is "inclined to reserve all judgements" and this leads others to feel comfortable confiding in him. Unlike Tom, Daisy, or Jordan, Nick is never quick to judge another character's actions. He is not vocal about the way others conduct their lives.

It is this quality that makes him a reliable narrator. He does not quickly come across as accusatory or condescending, so his observations are easily trusted. For Nick, there is no "bad" guy. For most of the novel, he lets people make their own choices and mistakes without trying to interfere. The only break in this habit is when he tries to get Gatsby to go away for awhile, after Myrtle is killed. He is doing this for Gatsby's own good, but he does not push him when Gatsby refuses.

Nick is cognizant of people's free will. He does not feel it is his right to pass judgement on another person's life or action.