I will translate this sentence in two steps, trying to extract what I take it to say. First, the more literal translation:
Being the reason for a being defined by a nonentity, that means being the reason of a nothingness.
Grundsein consist of "Grund" = ground, basis, foundation,cause, reason and "sein" = being. I hold "reason" to be the best translation, as it seems to point at a relation of inference and not a material connection.
Now, as we are speaking about ontology and a criticism of German Idealism (and neo-kantianism in particular), I think that what I translated as "nonentity" can be held to mean "negativity". "Nichts" is nothing else than the absence of everything, pure negativity.
So if we have a reason to state something that we can only define negativly, do we really have reason to state anything meaningful? I think Heidegger here insists that we do not.
This is supported by the fact that "Nichtigkeit" in a literal common meaning could be described as "something that has no importance whatsoever" with a prejorative connotation. I do not know about the native connotations of "nothingness", so I do not know if the first approximation is a good one here.
Having said this, a second step could be a reformulation:
Being the reason for a being that can only be defined negatively means being the reason for a concept without any meaning or importance.
And this in fact means that whatever we have reason for to state, if it can only be defined negatively, it cannot be anything that is in an ontological sense. And in fact that it isn't even a reason in any meaningful sense, because it is not the basis for a valid inference.
So while Heigegger is said to have many neologisms, I think he often only exaggerates certain, sometimes only marginal connotations by substantivating in an unusual way. I take it to be a particular way of making neologisms, because it is not only inventing a word to have a technical symbol for a meaning that I want to have an original sound, like Peirce's "Pragmaticism" and the like. Heidegger plays with the german language and its native connotations and does not simply introduce a symbol for the meaning he wants to have it.
(For me, this is where the positive aspects of his writings, thinking and living end, but this is another story.)
About Neologisms in German and by Hegel
In German, it is normal to make new words out of others without making them inconceivable. If I say Schifffahrtskanalaufsichtsbevollmächtigter (authorized person [Bevollmächtigter] for supervising [Aufsicht] a canal [Kanal] for the ride [Fahrt] of ships [Schiff] => 5 Words and it can get even worse!), every native speaking German will get what I am talking about, although I just made it up. German is THE language when it comes to aggregation of substantivated words. And sentences. There are books consisting of a single sentence. So while it may not have an inherent beauty (these words feel ugly, really), it is common.
It may get beautiful if it becomes more of a playing, with suprising, exciting outcomes like expressing something clearly in one word you would have to think of a description taking a whole sentence. And, as mentioned, this is held to be one of Heidegger's strenghts.
With Hegel, I think it is another case. He sometimes, if he criticizes or more general: writes about other philosophers, can be very metaphorical in his language so that you have to develop a feeling, an intuition for the meaning. This is also the case if he gets into phenomenology. But when it comes to his actual argument, the terms are quite technically defined. The problem is getting the difference between these two aspects of almost lyrical writing and the necessary construction of the concept of philosophy as a science, especially in the Phenomenology of Mind.
Here, the "uglyness" does not come from the neologism as such, but the frustration of having the impression of reading a wall of text, a mere sequence of symbols you cannot conceive. If one can parse the sentence there is in fact a certain beauty in how brilliantly he is able to describe something that is seemingly undescribable (e.g. the phenomenological parts). But his neologisms are really technical and not beautiful at all.