Taminy,
In response to your question...what we were stuck with was a classroom situation where the teacher selected books for each child and strongly resisted letting kids choose any of their own reading materials. We kept asking for chapter books for DD7 and she kept being handed picture books, which frustrated her no end. Any free reading choice would have been a HUGE improvement!

Is there any possibility of "subject-level acceleration" into a higher grade class for language arts/reading? That would have the obvious advantage of more advanced peers to talk to about books.

Another possibility--but a time consuming one for you--is to ask if you could design some "parallel" reading and writing assignments with the teacher's input. Teachers' stores have some good resources for novel study, for example, that you could draw on, and that include more vocabulary and language study.