This is an issue with updated Nvidia drivers breaking the Frame Gen Mod, not down to Sim update 16 or the Nvidia App. The workaround for me pending a hopeful fix of the Frame Gen Mod was to roll back to Nvidia driver version 577.00 and the Frame Generation option reappears in MSFS 2020 and any other sim/game you've added the mod to.
Sounds like exactly what I got. What I'd missed and eventually read in the developer notes>known issues on the GitHub was that when installing the application don't select any of the Autostart options as they aren't working. Reinstalled and the application window now shows properly.