Dear Leila,
This teacher sounds hopelessly disorganized. And if she's giving kids negative feedback (telling they're the worst class ever, etc.) without giving them tools to solve the problem, then you're right: she's a bad teacher.
With the principal, I recommend the following:
Start by saying "I am really committed to my children's schooling, and I believe in working hard with them to make sure they succeed. With this teacher, though, I don't feel like I have the tools to help my daughter succeed."
Then, give the principal a very short list of problems:
1. The fact that the teacher told her she was missing important tests but wouldn't let her retake them.
2. The fact that there's very little homework, and this will not prepare your daughter well for jr. high.
3. The fact that the progress report didn't have enough information.
Then, state clearly and simply what you want: Your daughter should switch classes. Mention then that she already had to repeat a grade and that you feel she really needs to be in an organized environment where expectations are very clear.
Don't expect the principal to agree with you that she's a bad teacher. Your goal is not to be told you're right; your goal is to get your daughter in a different class. But if you write down a list of three complaints and one request, and stick to that, you'll do great.
P.S. If your daughter is having trouble with math homework, I also recommend asking for outside help, like a tutor.
P.P.S. You sound like a great mom! Just hold your head high, and remember: You're asking for something you have a right to ask for. You have every right to be there, and to have your request granted.
Best wishes,
Mira