awk '
  # BEGIN runs before any of the input files is opened
  BEGIN { FS=OFS="\t" }
  # The input files are processed one by one and the following code runs for each line
  # FNR is equal to NR when processing file1
  # a[ ] is indexed by the one letter code, its value is the three letter code
  FNR==NR { a[$1]=$2; next }
  # The next goes to the next input cycle
  # The following code runs for file2 (and further files)
  $12 ~ /:NM_/{                                                 # search $12 for pattern :NM_
            match($12,/p..*/)                                   # using match the regex will match in $12 from the p. to the 
            VAL=substr($12,RSTART+1,RLENGTH-2)                  # Put the values of substring whose value starts from RSTART+1 to RSTART-2
  # update one letter code to three letter by storing the value of $12 in array then updating if it matches file1
  { if(a[$12]){$12=a[$12] };
  }
  print}' file1 file2 > out

4	chr1	949597	949597	C	T	exonic	ISG15	.	.	synonymous SNV	ISG15:NM_005101:exon2:c.237C>T:p.D79D	rs61766284
5	chr1	949654	949654	A	G	exonic	ISG15	.	.	synonymous SNV	ISG15:NM_005101:exon2:c.294A>G:p.V98V	rs8997

# store value of $2 in file1 in array A and update each sub-patter of p. matching $12 in file2
awk 'FNR==NR {A[$1]=$2; next}  $12 in A {sub ($12, $12 "p." A[$12]) }1' OFS="\t" file1 FS='\t' file2 > out

R_Index	Chr	Start	End	Ref	Alt	Func.refGene	Gene.refGene	GeneDetail.refGene	Inheritence	ExonicFunc.refGene	AAChange.refGene	avsnp147
1	chr1	948846	948846	-	A	upstream	ISG15	dist=1	.	.	.	rs3841266
2	chr1	948870	948870	C	G	UTR5	ISG15	NM_005101:c.-84C>G	.	.	.	rs4615788
3	chr1	948921	948921	T	C	UTR5	ISG15	NM_005101:c.-33T>C	.	.	.	rs15842
4	chr1	949597	949597	C	T	exonic	ISG15	.	.	synonymous SNV	ISG15:NM_005101:exon2:c.237C>T:p.D79D	rs61766284
5	chr1	949654	949654	A	G	exonic	ISG15	.	.	synonymous SNV	ISG15:NM_005101:exon2:c.294A>G:p.V98V	rs8997