@ebrown p,
I'm only speaking for myself and I didn't go to public elementary school, except for kindergarten.
In my elementary school, appreciation tended to mean something, whether it be a shiny star or a Satisfactory grade, it wasn't that you tried. That would have been under Deportment (satisfactory, unsatisfactory). There are some people, brilliant or not, who learn for their own reasons, whether or not they get acknowledgement, but those I've known work that out over some time.
I grew up in a rigid (while sometimes playful) elementary school. One nun to, say, 45 students. A moderately rigid girls' high school (classes for college prep, secretarial, and I don't remember the other categories). A breath of fresh air college, where thinking was fostered (what? I loved it), and university, where the world was open suddenly, and luckily for near free (remember, this was long ago).
To me what happens is that understanding something is it's own reward, and the grade is just a verification, or a clue to you're not there yet. As others, I'd probably have been insulted to get a star for trying. I'd have figured Deportment, just one tick on the boxes, would have covered that.
The biggest difference between then and now to me was the that kids in grammar school in the forties who were doing badly were considered the dummies, disability being a word we'd never heard of, and sometimes were the cutups. The class often, in my memory, was on their sides, as was the nun, depending on the nun and the year.
I have friends who were in that group, who wouldn't remember it the same, re their schools, indeed, heatedly differently.
I don't have any answers, education isn't my field, but I'm not sure no distinction re grades, essentially no grading, is a solution: it seems a gross solution, when more particular attention would seem to be the answer.