Well, if you're overreacting, then so am I, as I have just spoken to DS1's school about persistent bullying. DS1 is nearly 11 and came out of school today looking unhappy - once away from the school he burst into tears . Trouble is, he is a very sensitive child and some boys in his class have picked up on this and have been persistently bullying him and undermining his already shaky self-confidence. They too call him names which are ridiculous (such as "stupid", when he is actually one of the brightest in the class). As bullying goes, it might be deemed to be minor, but it is the drip-drip effect of it that does the harm. DS1 is now saying he doesn't want to go to school anymore (and this from a child who loves school and loves learning) and that, when he goes to secondary school in September, he hopes that none of his classmates go to the same school so that he can start afresh.
Problem is that, when bullies find out that their chosen target is affected by what they say, it is very hard to stop them. It's all very well saying, ignore them and they'll stop. Very often they don't stop because they know they can wear you down.
I don't often step in to protect my children as, to a degree, they have to learn to deal with these situations themselves, but this situation is heart-breaking.
I can understand how your daughter feels and I think you should speak to the school so that it is nipped in the bud.
I do wonder what goes through the minds of these children who so deliberately set out to make other children's lives a misery.
Sorry - rather hijacked your thread there, but loads of empathy.