How can the hadiths that indicate water was the first of creations be reconciled with the hadith of Ibn Abbas, "The first thing Allah created was the Pen," in order to resolve the contradiction that could lead to atheism?

There is no room for atheism due to issues like these, for the disagreement is not concerning the texts of the Qur'an and authentic Sunnah, but rather concerning their understanding and the words of the scholars. The statement attributed to Ibn Abbas, "The first thing Allah created from anything was the Pen," is mawquf (stopped at a Companion) and not marfu' (traced back to the Prophet), and Ibn Abbas's opinion on this has varied. The point is that the disagreement is among the scholars in their understanding of the texts, not between the texts themselves. The apparent meaning of the marfu' hadith of Imran ibn Husayn, narrated by Al-Bukhari, is that the creation of water and the Throne occurred before the creation of the Pen, and this is the more preponderant view. The Pen being the first of creations is only in relation to the command to write when it was created.