You can make a very simple boost circuit to boost up the voltage so that you can drive the N-channel MOSFET in the high side configuration. In fact, you can even generate the required PWM signal from the ATmega itself. You can't use a capacitor-based bootstrap driver if you have high duty cycles.
Your method looks like it's going to employ a form of 'pulse charging' to 'regulate current' (which if you want to do you need to measure the current using a shunt for example). If you plan on just turning the MOSFET on and leaving it on until the battery is charged completely, that's not a great idea. You'll have no control of the current and can easily damage the battery.
One method employed in many commercial inverters is to control the charging on the primary high voltage side of the transformer using a triac and a lower voltage tapping on the primary. By using phase angle control, the voltage and current on the primary side and thus the secondary are controlled. While this isn't necessarily the best method, it's one that's widely used and works well.
Hope this helps.
Tahmid.