Why IS is not in NL, only in NP?
First, $NL\stackrel{?}{=} NP$ is still open, so $IS\in NL$ is possible (within our current knowledge, though we believe that they are different).

The problem with your proof, is that when you "guess $k$ vertices", you have to write them in your memory (when we say "guess", we mean that we write a vertex in the working tape, where at each step our machine writes either $0$ or $1$). Keeping $k$ vertices simultaneously (where $k$ is part of the input), requires more than logarithmic space.