If we replaced that nitrogen with another inert gas or pure oxygen, we could still survive. Thus rendering nitrogen non-essential.
You are correct that it doesn't need to be nitrogen. That 78% of the atmosphere's mass/density/volume is still essential.
If we replaced the inert nitrogen with oxygen bad things would happen. Oxygen supports combustion. If the atmosphere was 98% O2 the little spark I threw today at work knocking a rotor loose would have burnt down the whole garage, at least. Also, if you over-oxygenate humans you get interesting results. We can get high on Oxygen, in sufficient concentrations.
Helium is considered an inert gas. Lets replace the nitrogen in the atmosphere with helium. We'd all die. From laughing at each other's ridiculous voices. Also, balloons wouldn't work right anymore.
Radon is an inert gas. Do I need to explain what the issue with making the atmosphere 78% radon is?
Nitrogen (7) and Oxygen (8) are fairly well matched for molecular weight. Neon is close at 10, but heavier. Argon, Krypton, Xenon, and Radon are all significantly heavier than Oxygen, and in large quantities would likely either displace the O2 up towards the upper layers of the atmosphere, or make it too heavy to effectively exhale, both making it very hard to breathe.
So actually, it may be essential for that 78% of the atmosphere to be made of Nitrogen.