It is said that Costello and Moretti were both Calabrese, grew up together in East Harlem, and were, in fact, blood cousins (whether of not that last part is true is almost immaterial. because the very fact that such a claim would even be made, shows how close the two of them were considered).

So when Frank was elevated to the "Acting Boss" position, it makes perfect sense that he would also elevate his 'compare' Willy Moretti to be his "number two."