This actually brings a lot of things together for me. Growing up, and even in adulthood, we use it a lot when referencing small things that protrude. ie, a man's nipple. "Put your nibs away". I thought it was just a weird slang, but now it makes sense. 

Can this term also be used to refer to the point at the top of some people's heads? 

Hmmm, I wonder if niblets have have a point.  If so, that  could be dangerous.