How to sort Pin 1 (Passive) of 'xx' component is not driven - KiCad ERC check
You are connecting a passive (C5) to an power input pin (AREF).  Since Atmega32 allows internal VREF, pin 29 should properly be labeled passive.  Since it is not, you can either change the library part or add a PWR flag to the line right next to pin 29.