What's being described is an X-Y scatter plot:

         Necessary
             ^
             |
  Simple <---+---> Complex
             |
             V
        Nice to have

This makes the most sense to me.

If I were in the OP's position, I would start discussion with the direct manager as early as possible - and begin by breaking down the remaining scope in terms of where the features are in this diagram.

If the product must be "ready to ship", clearly some corners will need to be cut - especially the bottom right.

Exactly.

The X axis would go from low risk+complexity to high risk+complexity, and the y axis from low biz+cus desirability to high biz+cus desirability.

You are correct that the way you described wouldn't work.

Yes it seems like an item would be posted on an axis where theoretically the item could exist on both ends?

Nice to have should really be, not necessary. Problem with that is the product team will be less likely to mark things as not-necessary. So we dub these less needed features as nice to have so there's a higher chance of negotiating about their priority.