You sound like you are BU in your posts- and it sounds like your expectations of your daughter are higher than she can deliver. She can progress, and with extra work she probably can progress more rapidly, but is she not where you would like her to be because of a gap in learning or coming over from a different system or is it that she is not working to the same levels as her class peers on the whole.
If your DD is at a private school and a few things in your thread suggest she may be-then the chances are the school are ahead academically compared to the state sector on averages, that isn't to divert this thread it is a statement of fact, most independent schools are academically ahead, it is what a lot of the parents hope to be paying for. So is it the class average she is below or the national average for her age group?
I think the key is your DH was annoyed at how you handled the whole thing- and I do think you need to consider the feelings behind his annoyance.
I would applaud her high efforts in work ethic and participation- but in your shoes I would consider whether she is in the right school for her. Different schools celebrate a range of talents, and if she was in a school that celebrated her broad successes you might be able to celebrate them also. Because I also agree with Drudgetrudy about you seem to view your daughter.
I also agree with the previous poster who says the GPs are looking at this with the benefit of hindsight, I know a couple of very clever people that are adrift in life succeeding at nothing despite great grades because they have pretty much tripped over how clever they were to be trained by the school into good grades.
I know some very clever and talented people who have an amazing work ethic and are thriving in their fields
I know a few more who worked their bottoms off-didn't always get the good grades, or didn't get the private education expectations of them but still have risen highly from perseverance and diligence- they range from cocky to admirable.
Einstein was considered mentally handicapped (the language of his era) because of his lack of academic performance- Isac Newton was not considered clever at school, or at farming. Clinton wasn't expected to amount to much Churchill probably brought home reports much like your daughter.
From what you have said about your daughter's reports she has many of the traits that may allow her to become like the figures above, maybe what your MIL sees is that you need to have a little faith in her, those reports may be worth a fortune at auction one day.