Both are true. I would not call the mind “an instrument you use”. The brain is the instrument you use. The mind is the dreaming mind, and it uses itself as an instrument to navigate the dream of characters it has, itself, created. So it is correct that it cannot realize its own illusory nature. You realize it with “something else”.

This “something else” is the witness Nisargadatta is referring to. The witness is also ultimately a percept of the mind/brain, which is needed to start observing the dreaming mind instead of actively participating in it, as it happens in the dream state. As one disengages from the mind, the dream starts to slowly dissolve.

That’s ultimately the purpose of meditation - to practice simply witnessing, to discover that witness. When that happens, that’s self-realization. Experientially it feels like jumping “out” of mind, “beyond” the mind, it may even feel like “jumping” out of the body. That’s the realization that the persona (“you”), which was created by the mind, is not real, imaginary. This is by far the most important event on the path to enlightenment, the end of seeking and the beginning of abiding awareness.