Complicated

Seriously... no seriously... when did childhood get so complicated?  My mind will forever be boggled by the complexities of childhood which is supposed to be the simplest times of all our lives.  Who raises bullies? I really am dying to know.  No parent wants to admit their child is the one picking on other kids, but some really need to face reality.  While they are busy turning a blind eye to their child's down right evil behavior, I am busy cleaning up the pieces of a broken 5 year old heart.  Ok now I am rambling.  Here's the deal; I had parent teacher conferences 2 weeks ago.  I thought long and hard about posting about it because the last thing my kid needs is a pity party, but I am frustrated and mad and I want FEEDBACK!  Back in October, I had a conversation with Lily's teacher after she had come home quite a few times very upset because some little shit kid was picking on her.  I didn't want to call, so at first I gave her things to say back to him.  He would say "Lily you are too little for kindergarten," "Lily you look like a baby," "Lily you are too slow," etc. etc. I told her to tell him to "Worry about yourself and not about me," and other things that I felt were appropriate for her to say (even though what I really wanted her to say to him would probably get her expelled).  I mean, I am no fool, I realize she is at least an entire head shorter than everyone in her class, but no child has the right to ruin another child's self esteem.  The teacher moved his spot in morning circle time and kept a closer eye out for Lily.  It seemed to be working as she mentioned his name less and less and I thought it was over.  So I sit down for parent-teacher conferences and first I hear about how she is doing well in her academic areas.  Not great, but good.  She is well beyond where her teacher thought she would be after reading her IEP at the beginning of the year.  She is still struggling in certain areas, but is coming along and trying really hard.  What more can I ask of her?  Then I asked about how she was doing socially, which I thought was going to be a "Are you kidding me? She is the most social child in the class!"  I was wrong.  She has one best friend, and clutches on to her.  She is too timid to ask other children to play with her, so when her friend is playing with other children, Lily is alone.  The other day in line walking back from recess, the little boy behind her told her, "Lily you are way too small for kindergarten and you walk way too slow."  Sounds stupid to us; not to her.  Her eyes filled with tears, but she didn't let them roll down her face.  On the playground, she can be seen sitting alone and when asked by the teacher what she is doing, her reply is "Nobody wants to play with me."  This is all seriously like ripping my heart from my chest, spitting on it, kicking it, punching it, and throwing it into a meat grinder.  It breaks me.  I can't imagine being so little and feeling so put down.  It isn't how the situation seems to you or I, it is how a 5 year old perceives it.  When I asked her about all this after conferences she told me she doesn't like to ask other kids to play because they say no to her.  I also asked the teacher if she was mean to other children and perhaps that's why they didn't like to play with her; however she told me she is EXTREMELY kind.  After talking to my Dad about it we decided it would be best for her to go see someone, so that is the short term plan.  I need some help from you guys!

How would you handle all this? What would you say to your child?  I have the teacher involved as much as possible and I feel she is doing her best. How do I not let my child's self esteem get ruined at the ripe age of 5?  HELP!  Any feedback is muchly appreciated!