Why not use the built-in “Generate > Silence”?
To answer your question, use the mergeclips header.
Note also that Nyquist only has limited knowledge of the Audacity environment, and treats time as relative to the start of the selection (or cursor position). This means that generated audio is automatically inserted at the cursor position unless you tell it otherwise. This makes the plug-in more simple:
;nyquist plug-in
;version 4
;type generate
;name "Insert Silence"
;mergeclips 1
;release 1.0.1
;author "Steve Chow"
;info "Released under under GPL v2."
;control duration "Duration of silence (seconds)" real "" 1 0.01 10
(s-rest duration)