It is thus compressed to a higher density. The air molecules near the bottom of the atmosphere are closer together just as the magnets are closer together at the bottom of the stack. The higher you go in the atmosphere the less air there is above so the air molecules support less weight, and are less compressed. Don't carry the analogy too far, the spacing between air molecules decreases as an exponential function of height. The spacing between the magnets decreases with height but not exponentially.
Mountain climbers notice the lower density air as they climb.
Your body is slowly dying above this altitude. The spacing between the magnets also provides a model for the repulsion of atoms and molecules. When you stand on the floor the weight of your body compresses the atoms in the floor. The atoms in the floor move closer together just like the magnets on the pencil when you push down on the top magnet.