I solved this finally!
I had another .conf file in my fpm/pool.d directory that had upload_max_filesize value in it. I was diligently changing the value in this conf file in addition to the php.ini file.
php_admin_value[upload_max_filesize] = 64M #comment
I also had what I thought was a comment in the same line. I suspected this was the issue. Removed the #comment. Restarted php and nginx. Voila. I can now upload images!
Thanks for your help, Patel Jignesh!
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