File system for internal HDD: "reiserfs" and "ext3" Ext 3 has NO problem at eSATA/USB. File size limitation is imposed by the file system, not the N1200. 700MB is not a limitation for the USB or eSATA.
The LAN port (100Mb) has very limited application. It is good for devices that will not go to internet, e.g. networked player. Since WAN and LAN are isolated networks. Of course, both ports can access the HDD.
Then your PC cannot go to internet But you are not intended to go internet, then it would be nice, because you can enable jumbo frame on both your PC and N1200, and no need to worry about the MTU size mismatch between J frame and internet pkt.