In my case the nullable variables/elements were all String type. So, I simply performed a check and assigned them string.Empty in case of NULL. This way I got rid of the unnecessary nil and xmlns attributes (p3:nil="true" xmlns:p3="http://www.w3.org/2001/XMLSchema-instance)
// Example:
myNullableStringElement = varCarryingValue ?? string.Empty
// OR
myNullableStringElement = myNullableStringElement ?? string.Empty