Several things to unpack in your questions.

1. yes, my PLAY:1s bonded perfectly as surround speakers for my Sonos Arc. You’re still restricted to a single matched pair of surround speakers, you can’t add more than that.
2. Not sure what controller 1 is, but the Sonos Arc requires S2 for it to be connected on your network. 
3. You can get lossy Atmos on an ARC connection, if your system is able to pass Dolby Digital Plus on that ARC connection. Check your TVs manual to be certain it can, and also be aware that not all sources are in Dolby Digital Plus, and Sonos won’t change that. If the source comes in in stereo, or just Dolby Digital, that is what the Arc will play. 

Moderator Note: Capitalised “Arc” to “ARC” for clarity

Thank you.

The beam would need to be on s2 but currently my play 1’s are on s1 - can they go onto s2 for rear sound?

Your Play:1s can run on S2.  Do you have any Sonos products that  cannot run on S2, e.g. Play:5 gen 1?

Edit: From your profile you do have a Play:5 gen 1.  So your options would be:

1. Split your system, leaving the Play:5 behind in a separate system
2. Use the upgrade credit on the P;5 to get a Sonos Five (or some S2-compatible alternative) and put your whole system onto S2

Yes, I have 3 Play 5 gen 1

Then you would have to upgrade them or split your system.  They can only run on S1 and the Beam (gen 2) can only run on S2.

https://support.sonos.com/en-us/article/sonos-s2-compatibility