@EKT,
Where are in located? Are you in the US? Which state? The parameters can be different depending where you live. But assuming you are in the US, most states do have certain expectations of reading or writing level at each grade. Have you met with the teacher to ask specifics? I am not sure how you approached this, but my suggested is that you write down the specific questions you want answered and to schedule a time to meet with her/him.
I would ask things like what is the expectations at this grade on grammar/writing skills? Is my child meeting these requirements and where is he falling short or can improve? How can we help him? Remember the child is not in school (assuming he is in the US) for 8 hours; most schools are 6 hours and remember within those 6 hours are things like lunch and recess as well as many other classroom subjects: math, science, history, music, physical education, art, health.
Your child might just simply struggle with writing. He may excel in math where he does not struggle. So he may need extra help outside the classroom or it could be your expectations on appropriate writing at his age is higher than it really should be. You will not know without asking the right questions, but be open and respectful and not confrontational. If you are respectful and ask questions in a way to gain understanding rather than criticize a teacher that is overworked and dealing with 30 other children, you are more likely it get a good answer and suggestions on how to improve his performance.
And as far as the 100% on his paper, what was the objective of the paper? Was it creative writing rather than say grammar or spelling? Maybe the creative part was worthy of 100%. We have no idea as you really need to reach out to the teacher, sit down with him/her, explain your background and why you are concerned and want to understand what the expectations are. The teacher may be able to better understand why you are concerned and the teacher could then perhaps allay your concerns.
In regard to phonetic spelling errors, this is common in young children. To me, this shows a child understands the sounds and relations of letters. Spelling, is not common sense, so a child could be very intelligent and spell poorly. This is not to say he should not learn correct spelling, just so you understand that it is common for children to make many of these spelling errors.