If your File1 has 700,000 lines, rest assured that a hash can easily accommodate this number of lines or even many more — if the lines are sufficiently short, i.e., not thousands of characters!

One pitfall to avoid: When you read each line from your File1, it will have some kind of line-end delimiter, typically a newline. This will have to be removed (see chomp) before adding it to the lookup hash because a COA213345 field split from the beginning of a line in File2 will have no such delimiter. (Looking up a key in a hash (see exists) is essentially an  eq string exact equality operation.)

Perhaps take a look at some of the articles in the Input and Output section of the Monastery's Tutorials.