In short: Romeo believes he has found true love with Juliet. He leaves behind his mopey, depressed self and his pining for Rosaline, instead embracing the youth and vitality he discovers in Juliet. This sparks his verbal jousting with Mercutio, who is overjoyed at the return of the "true" Romeo:
Why, is not this better now than groaning for love? Now art thou sociable, now art thou Romeo; now art thou what thou art, by art as well as by nature. For this drivelling love is like a great natural that runs lolling up and down to hide his bauble in a hole.
Mercutio is basically asking, "Now, isn't that better?" He's glad to have his best friend back to normal, and Romeo seems happy to have left that dreary personality behind.
As far as the Nurse is concerned, she suffers some rather lewd jests from Mercutio and Romeo. Once Romeo speaks with her alone, she seems flustered by the encounter and cannot focus on any one thing. She also misuses words several times in her attempt to appear important and intelligent. However, Romeo's responses suggest that her speech is having the exact opposite effect. He continually asks her what she means, & tells her that she is not understanding what he is trying to say. Romeo suggests that the Nurse is not the most reliable messenger in their exchange.
Romeo in Act I was lovesick over Rosaline, much to the chagrin of Mercutio, who is a cynic of teenage romance.
Now about to be married, Romeo is "restored," and he matches wits with Mercutio, making dirty jokes, puns, and rhymes. He matches Mercutio verbal stroke for verbal stroke, and Mercutio is delighted to have Romeo back as one of the guys:
Romeo has a private exchange with the Nurse to arrange the time and place of the marriage. The Nurse is chatty, easily confused, and paranoid about Romeo's servant's ability in keeping it a secret. Romeo keeps saying, "Commend me to thy lady."