Thank you all for quick replies. All the feedback is very welcome :-)

In report card:
4 means exceeding expectations
3 means meets expectations
2 means inconsistent meeting expectations
1 means needs more time to develop skills

There are different sections of report card and each section has subsections: Math, Reading, Writing, Communication, Science, Social Studies, Fitness/Arts, Social Skills

Her written comments for all sections starts with hard work/improvement. She mentions 99% in math test, also talks about DD's last writing assessment being compelling. To be honest, if I only read her comments, I see a picture of a girl working hard, showing progress/improvement despite her focus issues. Then I look into the grades and see bunch of grades dropped to 2 from 3. I would like to know, if there is progress/improvement, how do the grades fall?

For ADD, I talked to our pediatrician about it and he asked me to fill our a questionnaire. According to the scores in that, she doesn't meet inattentive, just below the borderline. He thinks given DD's skills in piano and her being eligible in gifted, there is not much to worry about, but watch closely etc. I am myself not too worried about this, as she is definitely improving in many ways.