Mr. Hal, I am a teacher and am licensed for PK-3, but teachers who are much older than me can hold a license for different grade levels. Most teachers that I teach with either have a K-8, or a 1-8. The state changes the licensing laws frequently which is a major pain in the ass!!!
As for your daughters handwriting, I am very surprised to see that the kids are even given a specific grade on writing. Usually handwriting isn't taken into consideration as a grade by itself, the teacher is usually looking at how well the student can write (such as grammatically, sentence structure etc.). If I was you, I would make sure you communicate your feelings with your daughter's teacher. She might be able to explain her reasoning so that it makes more sense than just looking at it on a piece of paper.
Hope this helps some!!