I'm not sure, but nvidia-settings could also write files to some other areas first which then triggers this file to be read. Having a /etc/X11/xorg.conf is deprecated I believe, I wouldn't be surprised if it's phased out entirely.
If I recall, I've seen this happen on a 14.04 or 15.04 machine before and it turns out the driver wasn't properly installed. Try re-installing it again, either switching back to Xorg from Additional Drivers, reboot, then reinstall. Or try the Ubuntu Drivers PPA which can install the latest NVIDIA drivers:
sudo add-apt-repository ppa:graphics-drivers/ppa
sudo apt-get update
At this time of writing, it's at 358.16.