We didn't have kids so near in the neighborhood, so we didn't tell many people except the friends who know him best and were not surprised. we just waited for questions after school started and said that the principal and the teachers thought it was more appropriate. But our DS was younger--skipping 1st. I would say in your case keeping it simple would be good. E.g., "just wanted to let you know that the school thought that 7th would be a better fit for DD. I'm glad that she has such good friends nearby in the neigborhood so it will be easy to stay friends after school."