Does it make sense to use R to read in and search through extremely large CSV file?
Depending how much data is in each column and if you're planning to do statistical analysis, I would definitely go with R. If no analysis then python with pandas is a good solution. Do not use office for those files, it'll give you a headache.
If you're brave and your data is going to increase, implement MongoDB with either R or python depending on previous need.
I have a CSV file with approximately 700 columns and 10,000 rows.  Each of these columns contains attribute information for the object in column 1 of each row.  I would like to search through this "database" for specific records that match a set of requirements based on their attribute information.
For instance, one column contains state information in the 2 letter abbreviation form.  Another column might contain an acronym referring to a certain geographic characteristic.  Suppose I'm looking for all rows where the state is NY, and the acronym in GRG.  
What packages should I use to handle this work/data anlaysis in R?
If there are no good packages in R, for handling such a large dataset, what should I look to using?
I am familiar with R, Python, Office and some SQL commands.
Edit:  I am not going to modify the dataset, but record (print out or create a subset from) the results of the querying.  I'll have a total of 10-12 queries at first to determine if this dataset truly serves my need. But I may possibly have hundreds of queries later - at which point I'd like to switch from manual querying of the dataset to an automated querying (if possible).