Why can hydroxide not be used to synthesise ethanol from ethyl amine?
Hydroxide may be a somewhat good nucleophile but the amide anion is one of the most lousy leaving groups you can imagine. If you want to remove an amino group in an $\mathrm{S_N2}$ reaction, it can only be eliminated as an ammonium cation — but protonating it means we can no longer use hydroxide as a base. Under basic conditions an amino group will never be a leaving group.

Instead, you must turn the amino group into something that is actually a good leaving group. If you include nitrogen and let your thoughts wander, you may arrive at the diazonium group $\ce{-N2+}$. Upon nucleophilic attack, this will be released as nitrogen gas which is great both thermodynamically and kinetically. This leaving group is so good that even relatively bad nucleophiles such as water will react with it.

However, you need to produce it from the amine. This is where nitrous acid comes in. Under acidic conditions, $\ce{HONO}$ will react with primary amines to give diazonium salts according to the following general equation:

$$\ce{R-NH2 + HONO + H+ -&gt; R-N2+ + 2 H2O}\tag{1}$$

Since nitrous acid is produced by acidifying aquaeous solutions of nitrite salts, you have all three components in hand if you ‘just’ add $\ce{HONO}$ or $\ce{HNO2}$.