Hi NeverknowinglyUnderstood
It sounds to me like the content of the writing is o.k. it's actually the penmanship.
In Y2 my DD1 (a leftie) really struggled to write more than a few words at a time. She would moan for England. We found that working on her hand skills/ strength helped.
We invested in more challenging colouring books with lots of detailed geometric/ fine patterning to colour in and invested in some crayola colouring pencils (Twistables). It sounds mad - but she will happily spend ages colouring (waiting at the doctors, in the car on trips, on airplanes, in front of the tv, etc...) and we found that this helped with her motor control.
Some great colouring books: www.amazon.co.uk/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=geometric+colouring+books&x=0&y=0
amazon also sells the twistable coloured pencil pens from Crayola.
I love the consequences game idea and may use that myself.
In terms of encouraging writing: we had DD1 send postcards whenever we had a day out or went on holiday (even sending them to school).
we encouraged DD1 to write in (rather than e-mail) to competitions in various children magazines or book series she reads
We encouraged DD1 to make home-made Birthday cards and write more than just 'Happy Birthday' - at first it was 'Enjoy your day' but now there's usually something like 'Have a wonderful day. I hope that all your wishes come true.' or 'I can't wait the hear what you think of this present. Mum and I found it in town and thought it was you all over!'
We had DD1 write thank you cards for every present, day out with relatives/ friends, etc...
We never forced it. If it took until end of January (as it did this year) to make thank you cards for all her relatives/ friends that was fine - it was a nice little project and she would work on it as and when she felt like it.
I understand that it is upsetting to realise your child is struggling - and sometimes it's the shock of absorbing that everything isn't ticking along swimmingly (that was part of what upset me when I realised DD1 couldn't subtract). The teacher is right to say this needs a bit of attention - I don't think she meant to upset you. Personally, I'd have been grateful if a teacher was as honest and up front with us about DD1 earlier on. I think you should see it as a request for a bit of your time and attention to get your DS back on track. I'm sure with your help and support your DS will be fine.