Hmm. Last trick I have up my sleeve would be to try to go do a different HiveOS first. Say 6.5r4. I was a big fan of it and still am for certain things.
I am unable to find 7.0r1 to try to put the same two images you have on your AP on one here to test. If I was a gambling man, I'd say that code was removed from the Aerohive download page for a reason and it may be the root of your problem.
As a last resort you may need to reach out to Aerohive directly for additional assistance. I'd be curious as to their fix though if you have to take this route.
Can you paste the output of a "show version detail" command please.
I suspect the firmware you want to move to is on the "backup" partition and you're getting the insufficient space error because there is no error that states "that version already exist on the disk".
If your backup version says "Backup version: HiveOS 8.2r4", you can simply do a reboot backup to tell the AP to boot off that partition.
