Oh wow, thank you all so much so far! This is awesome.
Have experience of the issues you are dealing with.
Initially I would seek a new diagnosis -some levels of anxiety need medication as the anxiety becomes so overwhelming that the sufferer is unable to focus on other methods of staying calm.
Sensory processing issues are not necessarily going to be resolved by continual exposure, especially as its exaberating her anxiety.
It seems you've found a platform of success for your Dd. ( By this I mean an arena that she feels she achieves well at.)
This is SO important -for our dearly loved adopted D it was basketball.
Personally I would go with the scenario that will give her success academically now, as it seems she is struggling in her current school situation.
As her anxiety decreases, her academics will improve, which after several years in MHO would be the time -if deemed necessary -for her to reintegrate into mainstream school.
I wouldn't stress too much about the socialisation thing -her friendship group will change over time at gym but this will also change over time at school.
Good luck☺
Thank you. My first thought was to have her re-evaluated across the board. We need to have her officially assessed for dyslexia, anyway, especially as she's seemingly lost her built-in supports with the grade/school change. In the past we made a long-thought-out decision not to medicate for her anxiety, especially as she had such marked improvement in her last school (3rd-5th grades). She has developed some coping mechanisms over time, but things have quickly escalated this year (probably even affecting gymnastics, as she started the school year, she quickly and progressively lost her level 7+ beam), so at least reconsidering medicating probably isn't a bad idea.
I actually happen to be working on a master's degree in teaching, with the full intent to start teaching in fall '18. So, homeschooling would definitely affect those plans, but I'm nothing if not flexible.

I've learned to adapt - I can figure something out.
I don't have any experience with home schooling, but i do have experience with middle school challenges for a child. three years ago i would have said there was little chance our son would be able to go to a 4 year college. depression, anxiety, social anxiety, add were all taking a real toll. in fact he spent many weeks either hospitalized or in intensive out-patient programs. needless to say, his grades were also terrible. fast forward to today -- just this morning we dismantled his 504 plan because there have been no issues for more than a year and he is a straight a student. the right diagnosis, the right meds, the right therapist and time have worked absolute miracles. which i tell you to illustrate the point that you shouldn't look too far into the future. make decisions that work for you and your family now. you might be completely surprised at what comes next or the changes you might see in the next few years.
apologies for no caps -- my left pinky is in a splint and the shift key is really hard to manage.
First Anna's Mom, thanks for replying despite the splint.

This is encouraging to hear. DD has definitely made improvements over time. I'm trying to keep my expectations of her realistic, though of course I always hope she'll blow those out of the water.

DD has come from zero reading ability 3 months into first grade to currently earning a B/B+ in reading/communication. Her effort is totally solid, she just still seems to have difficulty pulling it all together (spelling, grammar, word retrieval are all difficult for her, and she reads rather slowly).
Thanks again, everyone. I'll keep this all in mind. There's a really decent sort of online/homeschool blended program out of a local district that several friends/acquaintances are using. I'm looking into all available options, though that is currently at the top of the list, as if you continue through high school, your child may still attend a few classes on-campus (science/labs, etc), and we know of a few successful families.
DD ended up home sick from school Monday and Tuesday. We can access assignments, etc, through Google Classroom. I was a bit encouraged at how well it went working through all of the coursework with her. While it was only two days, it was quite positive (which led DD to beg even more for homeschooling!).