The ‘Too many input arguments’ error means that sim is attempting to pass more input arguments than ‘model’ permits. This is frequently the situaiton in MATLAB, since MATLAB functions require positional inputs to correspond to specific requirements. The idnlgrey documentation Description section defines exactly how these are to be passed, and the specific order.
Also, I would use the compare function to simulate the model and see how well it meets the requirements. The sim function will work, however it cannot tell how well the model fits the data.
(I have not recently worked with grey box models, and usually in relatively simple systems, so my background is not as robust as with some other System Identification Toolbox functions.)