If you think back to your school days, you'll see that bullying is nothing new. A "good" bully is an amazing natural psychologist, able to cull the weak from the herd and choose those that are least likely to talk about it. They will never do something overt that will get them recognized, just continue a pattern of making someone hurt emotionally or phisically. Other student won't get involved for fear of becoming the next target. Even if the bully gets identified, the parents can always make it almost impossible to punnish as each specific incident seems like nothing. Even if a student gets suspended, they'll be back a few days latter with a grudge.
Most adults have grown up and survived some form of bullying. They will look on the overt behaviours such a violence/fighting as unfortunate parts of childhood or wonder how could a seemingly good child (we're talking 7 years old here) proposition another for sex. It will also be seen as "toughening them up" and good for becoming adult. The extent of bullying seems unreal; the complaints seem unimaginable. Unless we have children directly supervised on an almost one to one basis, it is unlikely that bullying will ever be stopped.
As an aside, I wonder how many students were in the class.