What is First Reading?
Any proposal being dealt with by the European Parliament spends its life moving between the committees and the plenary. First Reading just means it is the first time that the proposal has been presented at the plenary.
First Reading is important in that if an item is approved without amendment at First Reading (and the general drive, from the Council point of view, is to get this to happen), then it usually gets approved by Council without debate and becomes law.
If the Council disagree with the European Parliament's position at First Reading, or if they are unhappy with amendments the European Parliament has proposed, then they will issue their Common Position, i.e. their stance on the proposal.
If you like a medieval analogy, the European Parliament throws down the gauntlet when it adopts its position at First Reading, and if the Council are not prepared to back down, they issue the Common Position which is effectively their acceptance of the European Parliament's challenge.