For any kind of magnetic data storage you need a magnetic state that is stable over time. The magnetic moment of an isolated single atom does not have any preferred direction, therefore the energy states are degenerated.
The 12 atoms used in this experiment is not a lower limit, in principle it can also work with 2 atoms given the right magnetic interactions between these two atoms. As you lower the number of atoms the probability of a flip of the magnetic moment due to thermal fluctuations of the whole cluster increases dramatically, so your information would be lost after a short time.
One atom can only be used if you use a different property, like position to store data. IBM even developed such a system with an atomic force microscope that could in principle use only a single atom but I am not sure how far they are with a practical application (Millipede memory).