Picked up this bike over the summer and really like it but just wondering why the big cogs on the freewheel are so big? What would be the purpose for this?

Well, it might act as a flywheel, but it's usually termed a freewheel. (Or more likely, we're looking at part of a freehub.)
The smaller chainwheel isn't so small. You need a small chainwheel or big rear sprockets or both if you (a) want to ride up steep hills or (b) are a weakling or of course (c) both.
Me, I'm (c). There are gradients of 18% (and even occasionally 25% or so) hereabouts, and sustained gradients of 10% plus. And I am enfeebled by a combination of age and a decades-long successful avoidance of any exercise whatever.
That is a mighty impressive dork disc, though.

duh, thanks for the correction. A little early in the morning for posting and I don't know why my brain inserts the term "freewheel". That's what I was thinking too, that maybe it was made to conquer the mountains in Japan with those big cogs? It is a significant dork disc and that will be coming off soon. Was working on another bike before this one but it's now the next project.

Looks like a 6-speed freewheel to me with a 32t big cog. 28t would be more normal to see paired with a short cage rear derailleur.

Yup, 6 speed and the picture maybe doesn't do it any justice but when you look at the bike it looks weird, I've never seen anything like it. It almost looks as big as the smaller chain ring.

I was looking online when I originally got the bike on the Shimano 600 series and most of the finds were about having it on older MTN bikes, so not sure if that's where it's from?

the giant pizza sized dork disc doesn't help.

You must be young. We older guys see a Suntour 32 tooth and want a 34 paired with a 42-52.

Chances are, the bike came with the standard 14-28 freewheel. Maybe the owner was having trouble climbing hills in his area. Swapping to a 14-32 freewheel would be an easy $10 solution.

On the other hand, some bikes did come with larger freewheels. My Fuji S12-S has a 14-30.

It looks totally normal to me but I have little use for old-fashioned road gearing.

It’s pretty close to the low gear of a compact double with an 11-25 cassette. Hardly outrageous by modern standards.

Ha ha well I don't think so if 52 is young but most road bikes I see have much smaller freewheel configuration or am I reading these posts correctly that usually you would replace them with something newer?
I'm just going to leave it for now as I don't plan on racing on it or climbing mountains, I just think it looks odd.

Only a flatlander would think that freewheel was Huge.

If you're mostly looking at very old racing bikes, yeah.

Nearly all modern road bikes come with at least 28 teeth on the big cog, with 30 or 32 also being common. Current-generation mid-cage Shimano road derailleurs officially support up to 34T, and they can usually handle somewhat bigger if you force them to.

Getting lower gearing.

The cog in your photo is 32T, and the chainring is 42T. It's nowhere near as big as the smaller chainring.

Even if it was, there's nothing esoteric about that. What's needed varies a lot depending on the rider and the rides being ridden. On my gravel bike, the small ring is considerably smaller than the biggest cog (24-32).