(((Lynn))) I'm so sorry that you all had to go through this.
The world is a complicated place these days. In my day this behavior would have been called playing doctor. These days we worry whether or not the girl has been sexually abused.
I think you did absolutely the right thing contacting the school. As parents I think we are too close to the situation to make an objective judgement. The school could also be privy to information you do not have and this could have been information they needed to convince them that something needed to be done. In any event they are the professionals and this happened on school property.
As to the invitation to the party, other than the obvious, they may have been trying to avoid an awkward situation. Assuming the best case senerio (girl discovered that touching herself felt good and has yet to learn boundaries) inviting her to a party could have been viewed as them dismissing it entirely. More likely they would rather pretend that this whole thing never happened; you and your family are a reminder of something that embarrassed them and they are reacting in a very human fashion, lashing out.
We do very stupid things as humans, it is so much easier to see the fault in others and ignore our own. I feel sorry for them. Instead of taking a very common and natural experience, using it to teach their daughter boundaries, and moving on. They've decided to take the path of least resistance and taught their daughter a very different lesson.