Why is my Nexus 5 not allowing me to Factory Reset?

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AC Question

I recently downloaded the newest Lollipop update (5.1). This morning when I was scrolling through Facebook, my Nexus 5 crashed, so I held down the power button until it powered down, then I tried to turn it back on but it became stuck in the 'Google' startup screen. I subsequently looked up how to reset the phone, and entered Recovery Mode.

This is what I was presented with after getting through to the the menu of options:

Android system recovery <3e>
LMY47I

Volume up/down to move highlight;
enter button to select

reboot system now
apply update from ADB
wipe data/factory reset
wipe cache partition
power down
view recovery logs

[then at the bottom of the screen in yellow, this message]

E: failed to mount /cache (No such file or directory)
E: Can't mount /cache/recovery/log
E: Can't open /cache/recovery/log
E: failed to mount /cache (No such file or directory)
E: Can't mount /cache/recovery/last_log
E: Can't open /cache/recovery/last_log
E: failed to mount /cache (No such file or directory)
E: Can't mount /cache/recovery/last_install
E: Can't open /cache/recovery/last_install
E: failed to mount /cache (No such file or directory)
E: Can't mount /cache/recovery/last_kmsg
E: Can't open /cache/recovery/last_kmsg
E: Can't open /dev/block/platform/msm_sdcc.1/by-name/misc (No such file or directory)
E: failed to mount /cache (No such file or directory)

Now, I have attempted to select 'wipe data/factory reset' and after pressing the power button with 'Yes -- delete all user data' the screen just goes black then after a few seconds the Android lying on its back with the red triangle containing an exclamation mark appears, and the process begins all over again.

I have reached the point where I have no idea what to do next, (my knowledge of this kind of thing is very limited) so if anyone could help, that would be really great.