Why does increase in pressure favor formation of water in water-ice equilibrium (at 273K)?
To answer this question, it is best to look at a phase diagram of $\ce{H2O}$. 
Note the axes are kilopascal and celsius, but we know that $0^{\circ}\text{C}=273\text{K}$ and $101\text{kPa}=1\text{atm}$. We can see that if the pressure goes up at a constant temperature, the system will move from the phase boundary into the liquid phase. 

The generally cited reason for why this occurs is that hydrogen bond network of ice makes it less dense than liquid water, and since higher pressure will favor the more dense state, the ice will melt to become liquid. This leads to a lower overall system volume.