So they take less than PAN (as they have in Reception) to manage the numbers they have already taken in? Admission would know if this is fair, but I rather thought it was not. Had you wanted a Reception place, I wonder what the outcome would have been? I thought schools had to take up to PAN in every year group.
Clearly there will be a change next year when the Y1 is still part of the KS1 numbers and become Y2. However, with just 36 children over two classes, does this mean they will admit 24 into Reception and not 18? How did 24 manage to be admitted in Y2?
I do agree that the school have not been clear with you. I assume they do their own admissions. Are the C of E or RC? I would also advise anyone to ask the LA for the "truthful" position on complicated admissions, even if it is not an LA school. They will know the numbers and the rules and can give appropriate advice.
By the way, you are absolutely not stupid and I am really sorry you felt underprepared and the school should have been clearer with the information they gave you. I think the school cannot have three KS1 classes because they do not have a third classroom - this is why they have two classes. The PAN and admissions appears to be a tricky situation in this school. You can re-evaluate the position for September, as you have said, but ask the LA Admissions Team for advice. When would you need to apply, what rules are pertinent, is there a waiting list, and what your chances are? They will know the numbers in each year group, which will help you. Presumably there are still advantages in your children going to a local school.
Are you renting nearby because you wanted this school? You say you were offered a house.