I thought you might be jumping the gun a bit until the last paragraph. That behaviour is COMPLETELY unacceptable and I would be strait down for a meeting in person about it. Making fun of body parts is NOT ok in school at any grade level. It is stamped out in kindergarten kids between age 3-5 and that's the end of it. I have to be honest my kids get a pretty good but not great education and I wouldn't let them keep going if there were ANY behaviour issues at all around them. Tat would be the one thing that had me bringing them home fastest. The children at their school are delightful. Always the best behaved and most polite group at any sporting event or excursion. That's why my kids are there.
Drawing is a wonderful activity for writing development. It really is
it does amazing things to finger muscles, hand eye coordination and the kids love it. It isn't long before they want to label their pictures and see a need to write and spell. This one you can be patient on, there is no real disadvantage to picking up writing skills later provided she is drawing or using pencils regularly to ensure the muscles are there when she needs them.
The reading is a concern. I would address this one with the teacher AND place a note up asking for other parents to assist in changing the readers. They should get a minimum of 2 books a week and realistically a new book every 2 days will ensure success for all children. I have been in this situation myself and I drummed up some helpers and then changed readers myself if I couldn't. It was hard work and I don't recommend it. Are you the one deciding when the children should be moved up a level? Or are you just moving them because they run out of books? Are they still being tested for levels 4 or more times a year? If not decide if its just this teacher or the school as a whole that is the problem. A year of poor teaching isn't the end of the world a school without heart is a big problem!
I think its time to speak up about your concerns. Their response to your words will tell you if you should leave or not. Don't be concerned about what your next child misses out on. They gain as much at home with mummy as they ever can in any school environment.