I pluck the hairs on my face and now they are very fine and hardly noticeable. No idea if this is relevant. I've got quite dark hair so they would be noticeable if I did not. My mu used to bleach hers. Hair on the body is normal.
Take your dd to a salon and find the solution that works best for her.
I agonized over my dd (also 12) wanting to shave her legs, she now does it and all is fine. Her choice.
Talk to your dd about how to handle the teasing (bullying). You could speak to school but only if your dd wants you to and only if you feel this is the best way to handle it.
Personally, I would encourage her to develop a care free "Oh bloody hell do we have to talk about this again." Attitude. If she has a good friend in the group she should be able to get the friend to join in in deflecting these statements/teasing. "Not again, give it a rest it is so boring!"
I feel really sad girls do this to each other, it;s body shaming and it is wrong, wrong, wrong. The school should tackle this without naming names but I would only involve school if you dd wants you to.
My dd has a few spots at the moment, but I also know she is just about the most beautiful girl on the planet, make she your dd knows she is also just about the most beautiful girl on he planet, and deserves great friends who value and support her.