I noticed that the 72 DT2 parts bike I picked up has a larger battery & battery box then my 71 DT1-E. Is there any advantage to putting the larger battery in my 71? I also noticed that there is a round item attached to the battery box that looks like it might be a flasher unit. Is that what it is?

Thanks

Most likely, yes.

Assuming that it's not faded, there should be some writing on the opposite end from the wires/terminals, including something like Nissan Denso (or ND) 6v 21w x 2 + 3.