Reaction mechanism for the conversion of acyl hydrazide to acyl azide
You are correct acyl hydrazide can be converted into acyl azide by adding $\ce{HNO2}$ also you wrote that the $\ce{NH2}$ group of hydrazide will be diazotisated making a $\ce{N2+}$ group hence I am assuming that you know the mechanism, after diazotisation the adjacent $\ce{N}$ donate the lone pair to the $\ce{N2+}$ group making the final product as acyl azide.

The mechanism scheme is in the following picture :