What do the words Nabi and Rasul denote? What do they mean? 

A Nabi and a Rasul are born with the capacity of being a Nabi and Rasul!

One who lacks this capacity cannot develop it later. It must be inherently present at birth.

With this capacity and the presence of the One within his essence, he overcomes the conditions of his composition by engaging in certain practices and observes Allah in his essence!

After observing Allah within his own being he submits to Him. He delivers the commands of Allah, the laws of Uluhiyyah, to the people, as the laws that will construct their eternal bliss.

This is precisely what a Nabi does; he delivers laws. 

 A Rasul on the other hand does not bring new laws but reminds the people of the laws that were previously delivered. 

What differentiates a Nabi and a Rasul from a wali?

A wali observes that existence is the One. As he rises in spiritual rank he begins to observe Allah. Eventually the walibecomes a conduit to Allah’s administration over the realm of existence. 

The wali does not administer, Allah does!

However, a Nabi and a Rasul, beyond the administration of the worlds, relays the divine laws to the people, explaining the divine meanings and hence aiding and supporting others to unite with Allah. 

A Nabi invites people to Allah, as someone who has reached the essence and the reality of existence. 

The fact that Muhammad (saw) is the final Nabi is due to the fact that he has explained and clarified all of the human and divine realities; there is nothing left to be explained.  

When he claimed, “I am the final Nabi” he was actually saying “I have explained everything that needs to be explained, I have left no need for another Nabi”.

The greatest person to come after him can only be one who provides the details of his teachings…

He can perhaps shed some extra light on to the matters that Muhammad (saw) left mystifying but he can never reveal a totally new reality.