Just came back to this because I was wondering how you'd got on. The stuff about the playground and the disorganisation are bad, and do suggest that this school is functioning overall well below the level of a good stage primary to me. But I suspect that you and your kids could live with that if the classroom was better. So it seems to me that the low expectations are the key problem here.
E.g. to come back to the 'fantasy animal habitat' task, it does still seem to me that that COULD be really rich and stretching. And it certainly COULD involve research, gathering material etc - for instance, it could involve researching the habitats of real animals and looking at how they affect the animals' existence/how animals have evolved to deal with them; investigating fantasy animals in art, literature, and myth; imagining what predators your animal might have to cope with and how they could fend them off... etc etc. Easily enough to stimulate and challenge a yr 4 child. But I guess the problem is that you and your ds knew that the school would be happy with a bit of playdough and glitter, so you didn't bother with all that, yes? Which would be a completely understandable response.
It does sound good that you've opened up a dialogue, and I hope that that leads to things improving for your dc. But honestly, I would go and look at the other local state schools. They really do differ hugely in character, IME. There are 4 state primaries within easy daily travelling distance for us. They are all well thought-of, and all quite different from each other in ethos and approach. You really need to see for yourself what things are like, OFSTED reports are really not worth much. Esp if - as seems to be the case - you have strong views about the particular kind of education you want for your children.
Hope you can change things for the better, one way or another.