When you generate a random key file it says that it can create the file anywhere between 64 and 1048576 bytes, so does that mean that a 1048576 byte file is more secure then a 64 byte file?
Mathematically speaking no. 64 bytes is 512 bit at which point guessing the keyfile is as expensive as guess the data encryption keys used for volume directly. Note that even if you use double or triple encryption a 512-bit random string is well beyond feasible for anybody to guess physically, as even guessing a 256-bit secret is.
The only argument for something larger than 64 bytes is that if you assume an attacker that can only say leak 1 byte per hour from memory / your filesystem (or something similarly slow), it would take longer to assemble 1MB than to assemble 64 byte. Of course the question of whether assuming such an adversary is sensible or not depends on your threat model...
In case you are wondering why it says above that the key is 512-bit long when AES-256 is used. The reason is that XTS uses two AES keys which are derived from the password in a secure manner transferring the security of the password to the combined key.