Welcome to AH!
I have atmos, while my space was not ideal for a 7.2.4 system, , I was able to get a 5.2.4 system to fit great with the 4 in ceiling atmos speakers in pretty good position according to the Dolby Atmos layout diagram.
https://www.dolby.com/us/en/guide/speaker-setup-guides/5.1.4-overhead-speaker-setup-guide.html
I do like what it delivers, but I've heard some atmos setups both (in homes and in store) that quite honestly were a waste of money imo. If you don't want to do any drywall repair etc. to get the side surrounds replaced to a better position, and the Atmos moved into a better position, you might be heading down that waste of money street.
My advice...5.1 is pretty darn good when done properly so make the 5.1 work first and build off that. As you said, try to use the existing in ceiling speakers (although not ideal placement, but where they currently are located) as atmos, and see how you like it. I started with 2 atmos, and went to 4...four is much better than two from my experience.