Can a case without strong physical evidence be prosecuted...

There doesn't have to be any physical evidence. At 17, your nephew can easily testify. If a victim is inconsistent in his/her story or contradicts in testimony, the law says "beyond a reasonable doubt" for conviction.

In my experience, perpetrators generally will admit (Jerry Sandusky excluded) when confronted by the victim. The prosecution should be supportive to your nephew and do everything to help him and his family out. If your sister feels he is not being properly protected and supportive, she should ask the prosecutor's boss to look into the situation.
Blissfully retired after 35 years treating sexual abuse