Hmm. The TOD needs a kick up the arse, imo. What you are saying - and what she has put in her own assessment - raises very clear and obvious red flags. An experienced, effective peri TOD will know to look out for these red flags, and will also be aware that the time she has to observe DD in the classroom represents 1/60th of DD's time at school, and is only part of the picture.
You could ask the TOD this - if DD is getting adequate amplification in the classroom, and if she thinks that the mainstream classroom environment is appropriate for DD, then what is the reason for her much slower progress? She is clearly capable of learning language at an age-appropriate level - you've demonstrated that through your own blood, sweat and tears - but something is not working out in the school environment - what, in the TOD's view, might that be?
You'll probably get fobbed off by the TOD at first, but drop in phrases like "concern at DD's inadequate rate of progress," openly wonder whether she is getting an "adequate education", and say that you're thinking about whether you should be applying for more binding specialist support via a statement.
This might prod the TOD into spending a bit more time on DD's situation, as her bosses will probably kick her arse at the prospect of a request for statutory assessment for a statement. If it doesn't, you'll need to take matters into your own hands by applying for a statement anyway - it's the best way to get legally binding provision in cases like these.
As for the 'outstanding' school bit - it's really, really common to find that 'outstanding' schools are total shit at dealing with SN. Many mainstream schools that have either got (or are striving for) outstanding status get the job done by adopting a certain set of priorities - priorities that mean that kids with SN are a problem for the school, rather than an asset to it.
There are some diamond places out there that don't do things this way - but there are many more schools out there that would rather see a child with SN leave the school in pieces than have the child mess up their carefully-cultivated attainment data. A 5 minute chat with the head of your current school will tell you which sort of 'outstanding' school your DD is in.
One other thing - if you're feeling under pressure, then give NDCS a ring. They have a team of regional officers who specialise in helping out in cases like yours, and they'd probably be happy to come along to any meetings you have with the school.
Best of luck! 