Just FYI - the Blu-ray player will never display "Dolby Atmos" when pressing the info or display button, but Dolby TrueHD 7.1 instead. Atmos is delivered within a Dolby TrueHD bitstream to the receiver and the receiver does the decoding.
Glad you got it working!
Also, 7-channel Stereo mode on your receiver is what many refer to as a "party mode" and is usually only used for playing music in a whole house or "party" setting where your main goal is to get sound out into a large area. It sends a stereo signal to all speakers, and is not a real surround mode.