You've gotten a lot of great insight into various elementary grading methods, but I'd add one more factor. In some schools the 1-4 scale is also reflective of the amount of support a child needs. For example...
4 - Needs Little to No Support
3 - Needs an Expected Amount of Support
2 - Needs More Than Average Amount of Support
1 - Needs a Concerning Amount of Support
You might have two students who average 90% on tests. In high school these kids would probably get the same grade (all other factors being equal) but in elementary school teachers are also looking at the amount of support each child was given. Perhaps one child seemed to get the concept easily and was given enrichment, while the other needed quite a bit of one-on-one instruction and practice. They both ultimately made the same grade on the test, but the report card reflects the fact that one child needs more support to actually make this grade, while the other seemed to grasp the concept easily and showed the ability to extend with enrichment exercises.
