Are nicaraguses considered Spanish people?
"Spanish" in this sense is a nationality, which would be people from Spain. People form Nicaragua are Spanish speaking, and can be classified as "latino". They are not "Spanish."
First of all, not only South Americans are considered Latino. All Spanish-speaking people are considered Latino. (Generally this does not include non-spanish countries in South America, such as Brazil). Second, the term Latino has come to mean only spanish speaking people, regardless of the fact that there are other latin-based languages.