What to do if my advisor insists on early attendance?

As a fellow night owl, I feel your pain. Normally I would suggest concisely explaining your difficulties and suggesting a work-around to your advisor, but it sounds like you've already done that. Sadly, your advisor does have the right to set working hours, so you have no real recourse other than finding a different advisor.

The situation might be different if you have a medical diagnosis/disability -- but I don't think "night owl" will qualify, since waking up early is not harmful to your health (not sure about French law though). What I've done in similar situations is to use melatonin to fall asleep early and caffeine pills to wake up -- probably not the healthiest solution long-term, but it does the trick for me.

He told me these are the rules of the institution and I have to follow them.

I've done my PhD and two postdocs in three different universities in France and I've never heard of such rules. On the contrary, my experience is that the standard in academia working hours is whatever works for you.

The problem is to avoid a confrontation with your advisor, as you probably don't want to have a bad relation with them. You could try a slowdown strategy (grève du zèle): you abide by their rules but you follow all the rules, that is working no more than the legal 35 hours a week, not answering emails or doing anything outside working hours, etc. Hopefully after a few weeks of this your advisor will realize that it's better to let you decide yourself how to organize your working time.

I'd say that's the French way to deal with it... sorry for the stereotype ;)

There are lots of jobs where you have designated hours. One of the nice things about grad school is a bit more freedom on hours (at the cost of drastically lower pay). But my advice is to just start working normal hours.

You CAN do this. Start going to be bed earlier (take a hot bath to help). Also start exercising in the late afternoon, early evening (before dinner, before getting diverted to TV or Internet). A little bit of physical tiredness helps with making it easier to get to sleep.