Apple TV (1st generation) cannot connect to the iTunes Store anymore, since May last year.
Apple TV (1st generation) cannot be synced through iTunes 12.7 or newer anymore.
Are you sure you have a first generation?
Some 2nd and 3rd generation Apple TVs have been known to show messages about needing a newer version system software for updating payment information. The newer security measures do not function on the older software, and you should update your account settings on a different device. Then it will be okay.
Apple TV (3rd generation or earlier) will not be receiving any software updates anymore. For newer software, one would also need a newer model Apple TV.