Working through / analysing a huge data file with a huge pattern file will take its time no matter which tool you deploy, be it grep or awk or what have you; so, saying "doesn't work" may be...
Closest I can get quickly:
while read line; do echo "^$line"; done <file2 | grep -of- file1 | sort | uniq -c
1 first
2 second
while read line; do echo "$line\$"; done <file2 | grep...