Units in the field would die as a singular stack (aka: stack kill).
There were two exceptions, and one exception-to-the-exception.
* Cities had units die one-at-a-time. This means that to siege a city, you were forced to build a stack (!!!). Attacking cities was always a dangerous operation in Civ 1/2 (though made easier in Civ3).
* Fortresses had units die one-at-a-time, but were relatively difficult to build. IIRC, they also took up room, so no farms or mines if you build a fortress. Still though, they served as a "city-lite". Civ3 revamped the fortress system rather severely, so this only really applies to Civ1 / Civ2... and the top-tier fortress in Civ3 (lower-tier fortifications IIRC didn't defend vs stack kills, only provided a minor defensive bonus).
The exception-to-exceptions was the nuke, as you pointed out. A nuke can stack-kill even in the stack-kill immune zones (cities / fortresses).
I think the only improvement that can’t exist together with fortresses in Civ2 is the airbase, and that can be a nuisance because airbases are bugged and act as a farm even on mined squares.
There were two exceptions, and one exception-to-the-exception.
* Cities had units die one-at-a-time. This means that to siege a city, you were forced to build a stack (!!!). Attacking cities was always a dangerous operation in Civ 1/2 (though made easier in Civ3).
* Fortresses had units die one-at-a-time, but were relatively difficult to build. IIRC, they also took up room, so no farms or mines if you build a fortress. Still though, they served as a "city-lite". Civ3 revamped the fortress system rather severely, so this only really applies to Civ1 / Civ2... and the top-tier fortress in Civ3 (lower-tier fortifications IIRC didn't defend vs stack kills, only provided a minor defensive bonus).
The exception-to-exceptions was the nuke, as you pointed out. A nuke can stack-kill even in the stack-kill immune zones (cities / fortresses).