I know each school is different, but at my school there is no way we would write up a seven year old for cheating the first time. I would deal with it in the classroom and not involve administration.
But I think the bigger issue is the lack of communication. You should have known his behavior was deteriorating before conferences. I would ask to set up a meeting with the teacher to put a behavior plan in place (including how and when you will be contacted). As a parent, you have the right to request a revaluation of his IEP and have him retested to see if he qualifies for special education. We also have a FBA (functional behavior assessment) to help collect sets on behaviors and form a hypothesis as to why a child is behaving a certain way - all behavior serves a purpose and meets a need. Sometimes kids need to learn replacement behaviors to meet a need in another way. A child does not need to have an IEP to have an FBA. I would see if your school has a similar process.
And I don't think that you are asking the teacher for patenting advice (and it's not her job). You ideally need to all be on the same page supporting your DS, but you are the parent and know him best. You should be valued and respected in the process. She knows the education side of things, but you are your DS's strongest advocate.
Good luck and I hope things improve!