Unpublished paper with published followup gathers citations: should it be published?
I see no reason that you really need to do anything with the first paper. In arXiv it is a stable, citable resource, people are finding it useful, and the citations are accruing credit to your work.

If you are concerned that people who are reading the first paper are unaware that it is obsolete, then you can add update its entry to add a pointer to the second paper. People will still likely continue to cite the first paper, however, either because they have reason to prefer it or because it's already in their reference collection and they don't revisit and see your update.

Other than providing a pointer to the second paper, though, I see no reason not to just let well enough alone, be grateful the people are appreciating your work, and move forward onto other things.