Surjective inclusions in Van Kampen's Theorem
Yes, this is correct. This is purely group theory, so allow me to rephrase everything solely in group language.
I'll going to set $Y = \pi_1(U\cap V)$. I'll write $U$ for $\pi_1(U)$ and likewise $V$ will denote $\pi_1(V)$.
We have surjective homomorphisms $p_u:Y\rightarrow U$ and $p_v:Y\rightarrow V$. I will, like you, use $N_u$ and $N_v$ for the kernels of these two maps. I will use $N$ to the smallest normal subgroup of $U\ast V$ which contains the set $\{p_u(y) p_v(y^{-1}): y\in Y\}$; so my $N$ is your $N(K)$.
With all this notation, our goal is to prove that $Y/(N_U N_V) \cong (U\ast V)/N$.
We define $\phi: Y/(N_U N_V)\rightarrow (U\ast V)/N$ by $$\phi(y N_U N_V) = p_u(y)N.$$
Further, since $p_u$ is surjective, every element of $U$ has the form $p_u(y)$ for some $y\in Y$. Likewise for $V$. Thus, we can define $\psi:(U\ast V)/N\rightarrow Y/(N_U N_V)$ by $$\psi(p_u(y_1) p_v(y_2) p_u(y_3) p_v(y_4)... N) = y_1 y_2.... N_U N_V.$$
I claim that $\phi$ and $\psi$ are well defined and that they are inverses of each other.
Proposition 1: The map $\phi$ is well defined.
Proof: Let $n_u\in N_U, n_v\in N_V$. We need to show that $\phi(y N_U N_V) = \phi(y n_u n_v N_U N_V)$.
Well, $\phi(y n_u n_v N_U N_V)$ is, by definition, $p_u(y n_u n_v)N$. Since $p_u$ is a homomorphism, and since $u_n \in N_U = \ker p_u$, this is the same as $p_u(y) p_u(n_v)N$.
The element $p_u(n_v) p_v(n_v^{-1}) \in N$ by the definition of $N$. But $n_v\in N_V = \ker p_v$, so $p_v(n_v^{-1})$ is the identity, so $p_u(n_v)\in N$. In other words, $p_u(y)p_u(n_v) N = p_u(y) N = \phi(y N_u N_v)$. Thus, $\phi$ is well defined. $\square$
Proposition 2: The map $\psi$ is well defined.
Proof: Here, there are two things to check. First, that if $g\in U\ast V$ and $n\in N$, that $\psi(g N) = \psi(gn N)$. Second, if $p_u(y_1) = p_u(y_1')$, $p_v(y_2) = p_v(y_2')$, etc, that $\psi(p_u(y_1)p_v(y_2)....N) = \psi(p_u(y_1') p_v(y_2').... N)$.
Let's knock out the first part first. Recall the normal closure of a set is given by arbitrary finite products of conjugates of elements in the set. So, it's enough to show that $\psi(n N)$ is the identity when $n$ is of the form $r p_u(y) p_v(y^{-1}) r^{-1}$ for arbitrary $r\in U\ast V$.
Writing $r = p_u(y_1) p_v(y_2)....$, we get $\psi(r p_u(y) p_v(y^{-1}) r^{-1} N) = y_1 y_2 ... y_n y y^{-1} (y_1 y_2... y_n)^{-1}$ which cancels down to the identity.
Now let's focus on the second issue. If $p_u(y_1) = p_u(y_1')$, etc, then there are $n_1, n_3, n_5,... \in N_u$ and $n_2,n_4,... \in N_v$ with $y_i' = y_i n_i$.
So, we need to show that $y_1 y_2....N_U N_V = y_1 n_1 y_2 n_2 ...N_U N_V$. Here's the idea. Focus on the $n_1 y_2$ on the right side. Rewriting this as $y_2 y_2^{-1} n_1 y_2$, the fact that $N_U$ is normal implies that $y_2^{-1} n_1 y_2 = n_1'$ for some $n_1'\in N_U$. Thus, $n_1 y_2 = y_2 n_1'$.
Repeating this same argument, we can change $y_1 n_1 y_2 n_2....$ into $y_1 y_2 ..... n_1' n_2'......$. Of course, the piece $n_1' n_2'....\in N_U N_V$, so $y_1 y_2... N_U N_V = y_1' y_2'.... N_U N_V$ so $\psi$ is well defined. $\square$
Proposition 3: The maps $\psi$ and $\phi$ are inverses of each other.
Proof: First, $\psi(\phi(y N_u N_v)) = \psi(p_u(y) N) = y N_u N_v$.
Checking the $\phi\circ \psi$ is the identity is a bit messier. It's enough to show that both $\phi(\psi(p_u(y)N)) = p_u(y)N$ and that $\phi(\psi(p_v(y)N)) = p_v(y)N$.
The first is easy: $\phi(\psi(p_u(y)N)) = \phi(y N_u N_v) = p_u(y) N$.
The second gives $\phi(\psi(p_v(y)N)) = \phi( y N_u N_v) = p_u(y) N$, not $p_v(y)N$ like we wanted to see. However, $p_u(y)p_v(y^{-1})\in N$ by definition, so $p_u(y)N = p_v(y)N$ and we are done. $\square$