Continuity mistake: After Dean zaps the TV with the remote, he lowers his right arm. The next shot behind Dean's right side shows him lowering his arm again.
Other mistake: In the original "Scooby-Doo" episode from which this episode is taken from, the house for the reading of the will was on an island as the Mystery, Inc. gang travelled to the house via motorboat. In this episode of "Supernatural", Sam, Dean, and the Mystery, Inc. Crew merely drive up to the house.
Answer: Angels themselves may not have genitalia, but their vessels do. Nephilim occur when an angel in a vessel reproduces.
Greg Dwyer