Does the size of the atom limit the focal length of telescopes?
Does the size of the atom place a theoretical limit on a telescope's focal length (and thus, resolution)?
No, the size of an atom does not limit the focal length of a telescope.
Halfway through this answer I further explain why the size of an atom isn't relevant and that instead we can use the size of an electron. Hydrogen is the smallest atom, it has one electron, one proton and no neutrons. An electron is 1/1836th the size of a proton; thus it is much smaller than an atom of $^1$H.
See Wikipedia's proton-to-electron mass ratio:
$$\mu = m_p/m_e = 1836.15267389(17).$$
The number enclosed in parentheses is the measurement uncertainty on the last two digits. The value of $\mu$ is known to about 0.1 parts per billion.
For an explanation of what actually does limit the focal length see: What limits the usable focal length of telescopes currently?, to see why an atom does not limit the resolution of a telescope skip halfway through this answer.
Visual resolution of a telescope is directly proportional to the aperture of the telescope. The focal length, and hence the magnification that can be achieved, is then just following on the visual resolution.
The telescopes today are usually so well build that they are diffraction limited, which means optical resolution due to diffraction is the limiting factor. If you want to have "higher magnification" in a telescope, you always want to have a larger aperture. The longer focal length may help, but is not quite necessary.
And, as Jeremy said, the limiting resource in this is money. There are some engineering problems with building extremely large telescopes, but most of these can be solved, given enough money, time and resources.
It is diffraction that limits resolution of a telescope, not the size of an atom. That part of your question is essentially what differentiates your question from the other.
See Wikipedia's page "diffraction-limited system":
The resolution of a given instrument is proportional to the wavelength of the light being observed, and inversely proportional to the size of its objective. For telescopes with circular apertures, the size of the smallest feature in an image that is diffraction limited is the size of the Airy disk. As one decreases the size of the aperture in a lens, diffraction increases. At small apertures, such as f/22, most modern lenses are limited only by diffraction.
In astronomy, a diffraction-limited observation is one that is limited only by the optical power of the instrument used. However, most observations from Earth are seeing-limited due to atmospheric effects. Optical telescopes on the Earth work at a much lower resolution than the diffraction limit because of the distortion introduced by the passage of light through several kilometres of turbulent atmosphere. Some advanced observatories have recently started using adaptive optics technology, resulting in greater image resolution for faint targets, but it is still difficult to reach the diffraction limit using adaptive optics
Log-log plot of aperture diameter vs angular resolution at the diffraction limit for various light wavelengths compared with various astronomical instruments. For example, the blue star shows that the Hubble Space Telescope is almost diffraction-limited in the visible spectrum at 0.1 arcsecs, whereas the red circle shows that the human eye should have a resolving power of 20 arcsecs in theory, though normally only 60 arcsecs.
Why is the size of an atom not a consideration?
See Wikipedia's page: "Calorimetric Electron Telescope":
The CALorimetric Electron Telescope (CALET) is a space telescope being mainly used to perform high precision observations of electrons and gamma rays. It tracks the trajectory of electrons, protons, nuclei, and gamma rays and measures their direction, charge and energy, which may help understand the nature of dark matter or nearby sources of high-energy particle acceleration.
For more information see: "The CALorimetric Electron Telescope (CALET) for high-energy astroparticle physics on the International Space Station" (O Adriani et al 2015 J. Phys.: Conf. Ser. 632 012023):
Figure 1. Drawing of the CALET payload. On the ISS the payload will be installed in such a way to have open sky on top, Earth on bottom.
Figure 2. Drawing of the CALET-CAL instrument, with a typical shower of secondary particles generated by a 1 TeV electron incident from top.
Page 2: "2.1. CALET-CAL instrument
The CALET calorimeter (see figure 2) is composed of a charge detector (CHD), a pre-shower imaging calorimeter (IMC) and a total absorption calorimeter (TASC). It is optimized for particle identification and energy measurement of several cosmic-ray species:
electrons and positrons in the 1 GeV - 20 TeV energy range (with no charge sign discrimination);
photons from few GeV to ∼ 10 TeV;
nuclei up to the Fe region, with energy from tens of GeV to ∼ 1 PeV;
ultra-heavy (Z > 28) nuclei with E > 600 MeV/nucleon (in this case, with no energy measurement).
The CHD, positioned on top of the IMC structure, is composed of two layers of plastic scintillator with mutually orthogonal segmentation in 14 bars (SciBars), each of dimensions 3.2 × 1.0 × 44.8 cm$^3$ and read by a photomultiplier tube (PMT, Hamamatsu Photonics R7400U-06) and front-end circuit (FEC) with charge sensitive amplifier, for a total of 28 channels. The CHD determines the charge absolute value |Z| of the incoming charged particle, through the Z$^2$ dependence of the specific ionization loss. The very low uncertainty in the Z measurement (0.1 for light nuclei up to B, 0.3 in the Fe region) allows for resolving individual chemical elements with Z from 1 to 40.
The IMC is a finely segmented sampling calorimeter, with surface area of 45 × 45 cm$^2$ and total thickness of 3 radiation lengths X$_0$; internally, 8 double layers of scintillating fibres (SciFi, 1 mm$^2$ cross-section) are interleaved with a sequence of 7 tungsten plates: 5 of thickness 0.2 X$_0$ and 2 of thickness 1.0 X$_0$. The fibres of each double layer are mutually orthogonal and arranged in belts, each read by a 64-channel multi-anode PMT (MAPMT, Hamamatsu Photonics R7600-M64) and VA front-end ASIC circuit, for a total of 7168 channels. The IMC fine granularity allows for precise determination of the incoming particle trajectory, localization of the starting point of the secondary shower possibly generated, discrimination of the primary incident particle against possible backscattering from the shower developing in the pre-shower
imaging calorimeter (IMC) and underlying total absorption calorimeter (TASC).".
Thus we can see a tiny particle, if it has enough energy, from as far as it can travel.